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UNITED STATES OF AMERICA. 



THE 



AKT OF INVESTING 



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NEW YORK 
D. APPLETON AND COMPANY 

1888 



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Copyright, 1888, 
By D. APPLETON AND COMPANY. 



PEEFACE. 



The appearance, over bis signature, 
in leading magazines, of the papers that 
principally make up the following bro- 
chure, has involved the writer in con- 
siderable correspondence. A number of 
parties have, in consequence, written to 
him : some requesting a fuller statement 
of his views on points partially dis- 
cussed or merely touched upon; some 
disputing his conclusions or having sug- 
gestions of their own to offer ; and others, 
who had been made aware of the exist- 
ence of the publications through news- 



4 PREFACE. 

paper notices or in some other way, and 
not caring to be at the trouble and cost 
of procuring the periodicals in which 
they were to be found, asking for a re- 
production of such passages as might be 
applicable to their special circumstances. 
The interest, as evidenced by the corre- 
spondence referred to, which the papers 
as magazine articles have awakened, 
seems to the writer to be ample apology 
for their reappearance in more accessi- 
ble and economical form if the dis- 
cussion of a subject of such general con- 
cern as the investment of money, with 
a view to an income more or less fixed 
and permanent, calls for apology. 

Somewhat in the nature of a sup- 
plement, has been added a chapter on 
speculation. People having idle money 



PREFACE. 



often find it difficult to decide whether 
they had better invest it securely, con- 
tent with the amount they have and the 
reyenue to be derived as interest, or 
seek to add to the principal by ventures 
necessarily more or less uncertain. The 
temptations to the latter course that are 
held out by our stock and other ex- 
changes are very dazzling — sometimes 
quite irresistible. It is to those institu- 
tions that persons of a speculative turn 
and with money in hand are apt to look 
for the realization of their hopes. To 
any who may be halting between the 
policies spoken of, with an inclination 
to do a little in stocks, the subjoined 
criticism of the methods and bearings 
of our leading exchanges that make a 
business of shares and bonds may prove 



6 PREFACE. 

to be both entertaining and instructive 
reading. 

A few alterations have been made 
in the original text, and some additions 
to cover points raised or suggested by 
communications from friendly hands; 
otherwise, the matter is unchanged. 

As the author prefers to avoid the 
suspicion of using this publication as an 
advertisement of his business — that of a 
broker in securities — the matter which 
in another form appeared over his signa- 
ture is now presented without that ap- 
pendage. 



CO^TE^TS. 



CHAPTER I. 

PAGE 

Investing 9 

Governments 43 

State Obligations 46 

Municipal Obligations . . . .56 

Railroad Mortgages 65 

Railboad Stocks 72 

Other Stocks 74 

Farm Mortgages ■ 79 

Ranch Securities 92 

Water-Works Loans 96 

Street-Railway Bonds . . . .107 
Miscellaneous Bonds . . . . 109 

Mining Securities Ill 

Bridge Bonds 113 

Substitution Securities .... 115 



8 CONTENTS. 




CHAPTER II. 






PAGE 


Speculating 


. 118 


APPENDIX, 




Investment Seottkities 


. 155 


New Yoke: Stock-Exchange 


. 157 


Philadelphia Stock-Exchange . 


. 185 


Boston Stock-Exchange 




Baltimore Stock-Exchange 


. 196 



THE ART OF INVESTING. 



CHAPTER L 

INVESTING* 

"How can I invest my money to 
make it pay a fair interest, and at the 
same time insure its safety ? " is a ques- 
tion daily asked by thousands. With 
the multiplication, consequent upon the 
growth of wealth among us, of that class 
of persons who want to live by their 
means, without care or labor, the num- 
ber of anxious inquirers on that point is 

* The greater part of this chapter appeared in 
" The Popular Science Monthly " under the title of 
" The Art of Investing." 



io THE ART OF INVESTING, 

constantly increasing. It would seem, 
when reference is had. to the many secu- 
rities, both bonds and shares, that are 
offered, often at temptingly low prices, 
to be a question very easily answered. 
The truth is, that there is none more 
difficult. The ordinary investor who 
goes about the work of converting his 
cash into paper combining the two ele- 
ments of value spoken of, finding himself 
hopelessly embarrassed by the seeming 
richness of the market, soon gives up in 
despair, and turns the job over to some 
banker or broker who works for a com- 
mission. Experience shows that even 
then he is too often the victim of defect- 
ive judgment or misplaced confidence. 
If it is difficult to make money — a 
proposition about which there will not be 



INVESTING. ii 



much diversity of opinion — it is in most 
cases even more difficult to keep it prof- 
itably employed. Men of prudence and 
skill in the acquisition of capital often 
show astonishing recklessness in the dis- 
position they make of it. The strangest 
caprices take possession of them when it 
comes to the critical moment that calls 
for a choice of investments. And as 
riches are always clothed with folded 
wings ready to expand at the most un- 
looked-for exigencies, it is not much 
wonder that they frequently take to the 
winds and pass beyond recall. 

The history of investment securities 
would furnish a most interesting study. 
In no other department of business have 
there been greater changes. The time 
has been, within the memory of many 



12 THE ART OF INVESTING. 

now living, when the man who had 
money to put at usury generally loaned 
on personal indorsement, the borrower 
relying on his neighbor or other good 
friend to "back" his paper for him. 
The mortgage on real estate, of course, 
was known ; but, owing to the short in- 
tervals for which loans were generally 
made, was not often resorted to. The 
shares of banking, turnpike, canal, rail- 
way, and other incorporated companies 
after a while began to absorb the money 
of people who wanted to realize more 
than current rates of interest, and were 
willing to take corresponding risks. 

Nor have we yet reached a finality in 
the matter of investments. Changes and 
innovations are of continual occurrence. 
Not only are new securities coming upon 



INVESTING. 13 



the market, but new subjects as a basis 
for their production are industriously 
sought after, and new forms for their 
preparation are being invented. Such 
things as commercial farm mortgages, 
water- works loans, street-railway debent- 
ures, etc., etc., were utterly unknown but 
a short time ago. Progress in the manu- 
facture of investment issues keeps pace 
with all material developments. Every 
newly-discovered force or process in me- 
chanics means the appearance of another 
detachment of paper securities. 

The war of the rebellion popularized 
the coupon bond, in consequence of its 
adoption by the Government, and made 
it the favorite form of investment paper. 
Railroad and other corporations lost no 
time in availing themselves of the confi- 



H THE ART OF INVESTING. 

dence which that species of debenture 
inspired, and States, cities, counties, etc., 
were soon flooding the country with ob- 
ligations carrying long coupon attach- 
ments. Except for Government and 
municipal uses, there never was a more 
disastrous invention. It lias been the 
means of numberless deceptions, and has 
inflicted heavier losses upon the invest- 
ing public than all other devices com- 
bined. Being supplemental to stock 
certificates, it has duplicated representa- 
tives of the same values and led to ex- 
cessive issues of paper; it has separat- 
ed capitalists from the management of 
properties into which their moneys have 
gone ; and, being based upon mortgages 
promising absolute security, it has too 
often accomplished the grossest decep- 



INVESTING. 15 



tion. Many a man has purchased and 
paid a good price for a mortgage coupon 
bond, giving him no control over his 
security, who would have rejected a 
share-certificate standing for an equal 
interest in the property pledged, and 
giving him the right to participate in its 
management, with the possibility of a 
greater return for his money. 

Under the careless legislation of 
many of the States, which has permit- 
ted corporations to decide for them- 
selves the amounts of obligations they 
might put out, it is no wonder that the 
privilege has been abused, and the mak- 
ing of shares and bonds, the latter rep- 
resented to be amply secured by mort- 
gage liens, has been carried to criminal 
excess. One illustration will suffice: 



1 6 THE ART OF INVESTING. 

The Arkansas Central Railway Com- 
pany (the name indicates the locality) 
built only forty-eight miles of its pro- 
jected road. The road was of narrow 
gauge, with very light iron, and in every 
way cheaply constructed. It cost less 
than ten thousand dollars per mile, in- 
cluding equipment. As has been the 
case with most of companies building 
railways in new countries, help in its 
behalf was asked from the communities 
to be benefited, and their bonds amount- 
ing to nearly half a million dollars were 
given it by counties, cities, etc. Un- 
der a statute providing for aid to rail- 
roads when their beds could be utilized 
for levee purposes, the company got 
$160,000 of State bonds. Under an- 
other statute it got, as a loan from the 



INVESTING. 17 



State, its bonds to the amount of $1,- 
350,000, which were to be a first lien 
upon the property. After such, abun- 
dant assistance, it would have appeared 
hardly necessary for the company to put 
out obligations of its own. However, it 
proceeded to issue and market its own 
debentures to the amount of $2,500,000, 
of which $1,200,000 purported to be se- 
cured by first mortgage, a representa- 
tion that, for reasons already stated, was 
not correct. In addition, a considerable 
amount of stock certificates was issued. 
Altogether, nearly $5,000,000 of paper 
was put out and negotiated on the basis 
of forty -eight miles of narrow-gauge 
road. But this proved to be insufficient. 
The road, for non-payment of interest on 
its bonds, soon passed into the hands of 



1 8 THE ART OF INVESTING. 

a receiver, who found it in such an un- 
finished state that, with the court's per- 
mission, he issued a considerable amount 
of his own certificates to provide for ne- 
cessary repairs and betterments. Then 
the road — the product of so much out- 
lay — was sold at public auction, and 
brought the magnificent sum of $40,000, 
which was paid, not in cash, but in re- 
ceiver's certificates that had been pur- 
chased at a great discount from their 
face ! 

The business of manufacturing secu- 
rities has not been confined to railroad 
builders. We now have stocks and 
bonds upon the market representing 
nearly all conceivable kinds of prop- 
erty — telegraphs, telephones, mines, cat- 
tle ranches, grain and grass farms, water- 



INVESTING. 19 



works, bridges, oil and gas wells, elec- 
tric lights, factories and mills of every 
description, patent rights of all sorts, 
steamboat lines, apartment houses, and, 
in one instance, a cemetery ! And not 
only are properties of many kinds used 
to issue bonds upon, but many kinds of 
bonds are often issued upon the same 
properties. Thus we find among our 
railroads not only first, second, and third 
mortgages, but income bonds, converti- 
ble bonds, consolidated bonds, redemp- 
tion bonds, renewal bonds, terminal 
bonds, divisional bonds, sinking-fund 
bonds, " blanket - mortgage " bonds, col- 
lateral trust bonds, equipment bonds, 
and bonds ad nauseam, until they lap 
and overlap in seemingly endless compli- 
cation. Not that merely, but one issue 



20 THE ART OF INVESTING. 

of bonds is sometimes made the basis for 
other issues. Indeed, one of the money- 
making devices of the time is the forma- 
tion of companies that issue their bonds 
on the security of other people's bonds 
that they have purchased, either yield- 
ing a higher rate of interest or obtained 
at lower prices than they expect to re- 
alize for their issues. There seems, in 
fact, to be no limit to the production of 
securities that are spread before capital- 
ists. There never was a time when it 
was so easy to invest money — and to 
lose it. Of the securities that are offered 
with first-class recommendations, it is 
probable that about one third are actu- 
ally good, one third have some value, 
and one third are practically worthless. 
Hence the very natural inference that 



INVESTING. 21 



whatever art there may be in the mat- 
ter of investing is to be exercised chiefly 
in the avoidance of unworthy offerings, 
and it is to that point that a profitable 
discussion of the subject must be mainly 
directed. 

For the condition of things de- 
scribed, the laws of some of our States 
in giving corporations almost limitless 
power to issue negotiable paper, as well 
as in permitting all sorts of companies 
to incorporate themselves, are, undoubt- 
edly, very largely to blame. Our banks 
are closely watched and very properly 
restrained from taking people's money 
on false pretenses; but how much bet- 
ter is it for railway and other corpora- 
tions to take it by means of legalized 
fictitious evidences of value? Banks 



22 THE ART OF INVESTING. 

are by no means the only corporate in- 
stitutions that need watching. One of 
the reforms that would seem to be very 
mucli demanded is legislation prohibi- 
tory of the creation by companies ex- 
isting by authority of law, of debent- 
ures or scrip not representing moneys 
actually paid into their treasuries, or 
proprietary interests whose values are 
to be determined by disinterested par- 
ties. Pennsylvania has incorporated sub- 
stantially such a provision in her con- 
stitution. Her example should be fol- 
lowed by all other commonwealths. But 
as long as corporations are permitted, 
almost without limitation, to flood the 
country with seductive promises of mon- 
ey payments and to have them offered 
in all our financial marts, it behooves 



INVESTING. 23 



investors to be correspondingly cautions 
in making their purchases. If the law 
will not protect them, they should be 
the more careful to protect themselves. 
But the security behind or beneath 
the debenture or other paper obligatory 
is not the only thing to be looked into 
by the investor. Even the form of the 
document may be important. A case 
in point, inasmuch as it shows how the 
preparation of an undertaking for the 
payment of money may change its ap- 
parent value, would seem in this con- 
nection to be appropriately quoted. 
Some years ago certain townships in the 
State of Missouri were desirous of aid- 
ing the construction of railroads with 
their credit. The State legislature, to 
that end, passed an act authorizing the 



24 THE ART OF INVESTING. 

issue and sale of bonds obligatory upon 
them; but it was stipulated — a very 
singular provision — that, instead of be- 
ing put out by tlie townships, the bonds 
should be executed by the officials of 
the counties in which they were located. 
Accordingly, debentures aggregating sev- 
eral million dollars were thus prepared 
and disposed of. The bonds bore the 
seals of the counties and the signatures 
of their officials. On the back and at 
the top of each obligation in large let- 
ters were the words "county bond." 
The instrument began with the recital, 
in the usual form, that it was issued by 
the county ; but farther on, and in the 
smallest type employed, came the state- 
ment that it was executed for and in be- 
half of a certain township, which alone 



INVESTING. 25 



was to be responsible for its payment. 
These bonds were extensively advertised 
as "county bonds," and probably in 
most instances, certainly in many, were 
sold as such, and it was not until pur- 
chasers had parted with their money 
that they discovered that, instead of 
getting the paper of well known and 
wealthy counties, they had secured only 
the obligations of townships they had 
never heard of before. It was then 
manifest enough that they had been 
made the victims of a piece of very 
sharp and very shabby practice. In 
very many cases the buyers of bonds 
and other securities learn, when it is 
too late, that their purchases, owing to 
some obscure and apparently innocent 

passage that had been overlooked or 
3 



26 THE ART OF INVESTING. 

disregarded, are very different from 
what they thought they were getting. 
How often have careless investors that 
supposed they were purchasing under- 
takings that would be good for long 
terms of years, and probably paid pre- 
miums to obtain them, ascertained at 
the end of comparatively short intervals 
that they were forced to accept in pay- 
ment the amounts nominated in the 
bonds in consequence of unnoticed 
clauses giving their makers power to 
redeem at their option? The lesson of 
such cases is obvious enough. It is that 
no one should ever buy a moneyed un- 
dertaking without having first carefully 
read it. This may seem like an un- 
necessary warning; but in truth it is 
a most material one. Thousands and 



INVESTING. 27 



thousands of dollars have been lost by 
the neglect of this simple precaution. 
"I didn't read the paper" is the ex- 
planation that has again and again been 
offered when time has disclosed a dif- 
ferent investment from the one intended 
to be paid for. The fact is that com- 
paratively few unprofessional bond and 
share purchasers ever carefully examine 
the instruments they acquire. They 
look at the headings, those parts that 
are in big letters, and take the rest for 
granted. It is a most unwise practice. 
Unless you are previously familiar with 
the document in all its parts, don't fail 
to read it before you buy. Read it all, 
the little type as well as the big type, 
the indorsements, the coupons, and all. 
Don't take somebody's else word for it. 



28 THE ART OF INVESTING. 

Examine the seal, the signatures, and 
even the embellishments. Something 
may be disclosed that will change your 
mind and save your money. 

But if there are tricks in the mat 
ing of securities, even more are to be ap- 
prehended in the selling of them, and 
should be guarded against with corre- 
sponding diligence. It is a notable 
fact that no poor securities are ever of- 
fered. They are always good so long 
as they are on the market. It is only 
after they have been purchased that 
they prove to be worthless. Interest 
has never been known to fail on bonds 
that were seeking investors, although 
default has sometimes followed very 
closely on the sale of the last obligation. 
Indeed, it is no secret that interest is 



INVESTING. 29 

often paid out of the proceeds of bonds, 
particularly railroad issues, the purchas- 
ers in that way getting a portion of 
their own money back while the pro- 
cess of marketing them is going for- 
ward, although such a thing has seldom 
been known to happen when the entire 
issue was disposed of. The advertise- 
ments of the bond-sellers are sometimes 
marvelous productions. No such securi- 
ties as they have to offer have ever been 
on the market before. They are abso- 
lutely safe; they pay extra rates of in- 
terest, etc., etc. The wonder is that, 
with so much capital seeking invest- 
ment, it is found necessary to advertise 
such perfections at all. In such cases 
it is hardly necessary to say that the 
only safe rule for investors is to find 



30 THE ART OF INVESTING. 

other uses for their money, however 
strong the temptation may be. 

A common expedient of bond-mak- 
ers and bond-merchants is to fortify 
their issues with the favorable opin- 
ions of eminent lawyers. This is par- 
ticularly the case when the obligations 
of municipalities, or of companies that 
are dependent upon contracts with mu- 
nicipalities, are offered, municipalities 
having shown an unpleasant disposition 
to go back on their undertakings. No 
exception can be taken to the practice 
referred to, as counsel learned in the 
law should in such cases always be con- 
sulted ; but the writer has to say that he 
has never yet known a security so poor 
that a lawyer's opinion could not be had 
to back it. Such testimonials should be 



INVESTING. 31 



taken for what they are worth, and no 
more. 

When so many seductive baits are 
offered; so many nets and traps, con- 
trived and constructed by clever brains 
and cunning fingers, are spread for the 
capture of those having money, is it sur- 
prising that the careless and credulous 
are victimized, and even that the saga- 
cious and prudent should sometimes be 
taken in? Nevertheless, for the losses 
they have sustained, investors, as a rule, 
have themselves chiefly to blame. The 
mistake made, in nine cases out of ten, 
has been the purchase of cheap securities. 
The hope of realizing a little more than 
ordinary interest, by buying paper at a 
discount, has proved to be the rock on 
which unnumbered capitalists have split. 



32 THE ART OF INVESTING. 

In addition to their money's worth, they 
have endeavored to get something for 
nothing, with the result most generally 
of getting nothing for something. It is 
remarkable how blind are people, ordi- 
narily sagacious enough to make money, 
to the fact that property can not pay a 
revenue beyond its producing capacity. 
For instance, how can a railroad com- 
pany, whose line is wholly or mainly 
built from the proceeds of mortgage 
bonds, sell them at a heavy discount, 
besides allowing large commissions for 
the selling, and then pay a high rate of 
interest on their face? Or how can a 
poor agriculturist, occupying a half im- 
proved farm out on the frontier, with a 
family to support, and grain selling 
barely above the cost of production, pay 



INVESTING. 33 



ten or twelve per cent, upon the capital 
with winch he does business. 

By what rule or rules is the investor 
to govern himself? No formula can 
guarantee him absolute safety. One 
thing, however, he can properly count 
upon, viz., that he must expect to pay 
a fair price for a good security — one 
that will return him no more than a 
moderate interest on his money. If he 
wants to speculate, and is willing to 
take risks, that is another thing. He 
can then look for bargains. As a 
general proposition, it can be asserted 
that the day for high prices for money, 
as the day for large profits in trade or 
manufacturing, or, indeed, in any regu- 
larly recognized business with us, has 
gone by. The capitalist who sends his 



34 THE ART OF INVESTING. 

money into a new section, or puts it into 
a new mechanical process or a new con- 
structive enterprise, may or may not 
make a hit, but for the ordinary and 
conservative operator the condition of 
the commercial and financial world gives 
warning that only small profits are 
to be looked for. The first and main 
thing to be studied is safety. And yet 
there is such a thing as going too far in 
the matter of prudence. The investor 
may pay too dearly for safety. There 
are securities which, compared with oth- 
ers that are to be had, sell at prices 
much above their real value. The rea- 
son is that everybody knows them to be 
good, and investors who don't want to 
take the trouble to investigate, or are 
afraid to trust both their own judg- 



INVESTING. 35 



ments and the counsels of their friends, 
are willing to pay extra prices for them. 
But there are plenty of others that may 
be had at lower figures, which are just 
as good. There is no reason in the 
world why the investor should not get 
at par all the paper he wants that will 
yield him six per cent, interest, and be 
as safe as any property can be under hu- 
man supervision. As heretofore stated, 
with the creation of new enterprises and 
properties, and the development of old 
ones, new securities are constantly ap- 
pearing in this country, and a fair share 
of them ought to be good. Indeed, our 
securities ought to be the best in the 
world. The sure and rapid growth of 
our resources supplies a reliable support, 
as long as fair intelligence and common 



36 THE ART OF INVESTING. 

honesty attend their production. The 
only thing is to choose with discretion, 
so many doubtful and even fraudulent 
issues appearing at the same time ; but 
no more judgment is really demanded 
than in purchasing lands and cattle. 

Two common and often fatal mis- 
takes should be avoided. One is in re- 
lying solely upon the advice of a broker. 
No one competent to form an opinion 
for himself should put his pecuniary in- 
terests unreservedly in the keeping of 
another. Such absolute confidence in- 
vites betrayal. By far the greater num- 
ber of losses to investors has been in 
securities purchased exclusively on the 
recommendation of interested commis- 
sion men. While it is well to get the 
opinion of a reputable broker, the pur- 



INVESTING. 37 



chaser should investigate and decide for 
himself. The other mistake is in giv- 
ing a preference to "listed" securities,, 
Many persons seem to think that 
stocks and bonds must have a value if 
they are quoted at some stock exchange, 
forgetting how many u fancies" have 
been ballooned until they have burst at 
such places. On the contrary, such a 
position is likely to expose them to ma- 
nipulation for purely speculative pur- 
poses. Stock-exchange quotations, as a 
rule, are unsafe guides to buyers. They 
represent not so much the value of the 
property as the pitch of speculation at 
the time. When securities are convert- 
ed into foot-balls for gamblers to play 
with, they are pretty certain to be either 
too high or too low. The only ad- 



38 THE ART OF INVESTING. 

vantage they can have is a readier mar- 
ketability in case of an urgent need to 
sell; but it is at the times when such 
need is likely to exist that they are 
pretty certain to be at the lowest point. 
No speculative help can long take the 
place of real value. Securities, in the 
long run, must stand upon their merits, 
and purchasers have merely to follow 
business principles as taught by the can- 
ons of common sense. 

In seeking investments, and espe- 
cially long-time investments, there are 
several things to be taken into account. 
There is not only the question of the 
kind of security to purchase, but the 
question of the time to purchase. There 
are opportunities to be looked for as 
well as pitfalls to be shunned. It is 



INVESTING. 39 



during periods and seasons of depression, 
when securities are forced upon the mar- 
ket, often to be sacrificed — and they are 
certain to come if waited for long enough 
— that the shrewd investor finds his rich- 
est harvest. That, however, can not be 
said of the ordinary investor. He usu- 
ally buys when securities are up and 
confidence is unimpaired, and becoming 
frightened as market values go down 
sells when they are at the bottom, and 
holds his money to reinvest in something 
else no better, and probably not as good, 
when the tide has turned. As a rule, . 
the best time to invest is when others 
are unloading. In money matters it is 
never safe to follow " the crowd." Nor 
is it safe (which, however, is little more 
than the expression of the same idea in 



40 THE ART OF INVESTING. 

another form) to purchase a security 
wlien it is on the " boom." A pecul- 
iarity of our money market, conservative 
as it is popularly supposed to be, is that 
it is constantly changing its favorites. 
Its offerings come in waves. Its deal- 
ings at one time may be chiefly in rail- 
ways, at another in municipal obligations, 
and at another the excitement may run 
to mining shares or mortgages on ranches 
and real estate. For the time all pro- 
fessional brokers and bond and share 
sellers urge their customers to adopt the 
popular issue, of which, as the result of 
the increased demand, there is almost 
certain to be an excessive if not fraudu- 
lent production. To yield to the press- 
ure at such a time is always risky. 
Old and tried securities, like old 



INVESTING. 41 



friends, are likely to be the truest and 
best. 

One thins; the investor would do 
well never to forget, viz., that there is 
always plenty of good securities in the 
market. No one with money need ever 
fear that others will get all the solid in- 
vestments, and, in the apprehension that 
there will not be enough of that sort to 
go round, put up with an inferior article. 
Don't let him choose what is not alto- 
gether satisfactory, under the impression 
that nothing else as good or better will 
offer. If he does so, sooner or later he 
will regret it. Something good always 
comes to him who waits with money 
in his hand. 

Another thing of a precautionary na- 
ture it is well enough for the investor to 



42 THE ART OF INVESTING. 

do, and that is to scatter his purchases. 
The old adage about putting all the 
eggs in one basket applies with peculiar 
force to investments. The tendency with 
those having but moderate sums to place 
at usury, and who need to be the most 
circumspect, is to make up their minds 
in favor of a single line of securities and 
put everything there. Of course, a fail- 
ure in that quarter is particularly disas- 
trous. The writer knew a party, some 
years ago, who decided in favor of mu- 
nicipal obligations, saying that he had 
satisfied himself that, on the whole, there 
was nothing else so reliable. Accord- 
ingly he put his entire available means 
into them. But practicing abundant 
precaution, as he supposed, he divided 
his money equally among municipal is- 



GOVERNMENTS. 43 

sues of Illinois, Missouri, and Kansas, 
they having the most paper at that time 
on the market. He thought he was cer- 
tainly safe as to part. But soon after- 
ward a wave of repudiation sentiment 
swept over that part of the country, and 
every one of his bonds was left in de- 
fault. It is well enough to scatter in 
kind as well as in locality. 

"With these preliminary observations, 
as a further aid in making a choice it 
may be well to take up the different 
kinds of investments and consider them 
separately. 

Governments. 

Of these there were at one time out- 
standing over two and a half billion dol- 
lars ; and, of course, a great deal of in- 



44 THE ART OF INVESTING. 

vestors' capital found accommodation 
there, with satisfactory returns ; but the 
amount has so diminished, and is so rap- 
idly diminishing, while prices have cor- 
respondingly advanced, that private par- 
ties who want to get the most they can 
for their money no longer look to that 
quarter. It is only when a place is 
sought for trust and other funds for 
which safety and facility of conversion 
are wanted rather than a high rate of 
interest, that governments are to be con- 
sidered. They are absolutely good and 
always marketable, but they are no long- 
er to be classed with investments whose 
claims call for serious discussion. 

The foregoing remarks, it is hardly 
necessary to add, refer exclusively to the 
obligations of our own Government. If 



GO VERNMENTS. 45 

we pass beyond the limits of this coun- 
try, we find not only an abundance of 
government issues that are seeking buy- 
ers in the markets of the world, but a 
corresponding variety in values and quo- 
tations. It is estimated that the civil- 
ized nations of the globe now owe, with- 
out including local or divisional under- 
takings, not less than $27,000,000,000, a 
sum which, if equally distributed, would 
impose an incumbrance of $720 on eveiy 
square mile of their territory, and a per 
capita indebtedness of $23 on all their 
subjects. The foregoing amount has ne- 
cessarily absorbed a very large propor- 
tion of the world's investment capital, 
and, as its tendency in many localities is 
to increase, it will continue to hold it 
for many generations to come. But, as 



46 THE ART OF INVESTING. 

we in America can create more home 
calls for money, the manufacture of se- 
curities being one of our chief indus- 
tries, than we can supply, there is no 
disposition among us to go abroad for 
investments, and we need not concern 
ourselves about the offerings made else- 
where. 

State Obligations. 

The unquestioned credit of " govern- 
ments " has led many persons to the in- 
ference that the next safest and best 
investment securities are the obligations 
of the States, as they rank second only 
to the national authority. How far that 
impression is verified by the facts of the 
case will appear from the statement 
that, of about twenty of the thirty- 
eight States of the Union that have out 



STATE OBLIGATIONS, 47 

sufficient paper to test their dispositions 
in the matter of paying debts, only eight 
or nine faithfully keep all their agree- 
ments, and as many as twelve, being 
nearly one third of the whole number, 
are in default as to all or portions of 
their outstanding obligations; that the 
State bonds that are promptly provided 
for amount to a little over $100,000,000, 
while the principal of those that are 
defaulted on or have been in default 
(some of them compromised by the sub- 
stitution of issues of reduced amounts) 
is not far from $200,000,000 ; and that 
the sum total of the delinquency, when 
unpaid interest is added, exceeds $300,- 
000,000. 

It is true that a considerable portion 
of the last-mentioned figure is made up 



48 THE ART OF INVESTING. 

of what are known as "carpet -bag 
bonds/' having been put out by States 
that had been in rebellion during the 
process of their reconstruction, and 
which are repudiated on the alleged 
ground that the governments creating 
them did not fairly represent the peo- 
ple of the States. But that is by no 
means true of all. Virginia owes the 
largest amount, and the whole of her 
indebtedness was created before the war. 
The same thing can be said of Missis- 
sippi's debt and of the most of that of 
Tennessee and some of the other de- 
linquent States. 

"When the reasons for their failure 
to maintain their credit are sought for, 
the most potential and obvious is found 
in the fact that States, under the na- 



STATE OBLIGATIONS. 49 

tional Constitution, can not be sued or 
otherwise legally proceeded against on 
account of their pecuniary undertakings, 
at least to private parties, and that con- 
sequently there is no way to compel 
them to pay if they are indisposed to 
pay. Some of them have shown that 
they are not above taking advantage of 
the situation. This is the more to their 
discredit, because it was not the inten- 
tion of the Constitution's framers that 
they should enjoy any such exemption. 
The Constitution originally gave a right 
of action against the States. The 
eleventh amendment, which inhibits the 
suing of States by private parties, thus 
taking away a right previously existing, 
was meant to cut off certain claims 

growing out of the Eevolutionary War 
5 



50 THE ART OF INVESTING. 

and for no other purpose, no one at the 
time of its adoption dreaming that it 
would be used by the States to shield 
themselves from subsequently contracted 
liabilities. The States that thus avail 
themselves of it are really guilty of a 
double fraud. But the fact that so 
many of them have not scrupled to do 
so, shows the danger of trusting to their 
pecuniary promises. 

Whoever buys the paper of a State 
should do so with the distinct under- 
standing that he has nothing but its 
honor to rely upon, unless the commer- 
cial relations of its citizens should be 
of such a character as to make its finan- 
cial credit important to their business 
interests. There is for that reason little 
likelihood of such States as New York 



STATE OBLIGATIONS. 51 

and Massachusetts ever repudiating their 
obligations. But when such conditions 
do not exist, the faith of a State is an 
uncertain dependence. The public con- 
science in the matter of commonwealth 
obligations is notoriously lax, what is 
everybody's duty being looked upon as 
no particular individual's ; and such a 
thing as State pride, except in the form 
of prejudices and antipathies, which are 
very likely to be directed against public 
creditors, can scarcely be said to exist. 
Of all the States, Virginia has professed 
the highest regard for her reputation, 
yet she has been the most brazen of 
repudiators. 

How easy it is for a State to ignore 
its contracts without attracting public 
attention to its conduct is strikingly 



52 THE ART OF INVESTING. 

shown in the case of Texas, which is not 
one of the twelve bond repudiators re- 
ferred to. Texas has issued, and now 
has outstanding, agreements to furnish 
land from her public domain calling for 
about eight million acres, an area near- 
ly three times the size of Connecticut, 
which she does not supply to the cer- 
tificate holders. No charge has ever 
been made that the warrants were ille- 
gally issued by the State or improperly 
obtained by those owning them. The 
State had the land when they were cre- 
ated, and could without difficulty have 
met her agreements ; but, after the war- 
rants were out, she proceeded to give 
away such extensive areas for the build- 
ing of a State house, for the endowment 
of universities, for the pensioning of 



STATE OBLIGATIONS, 53 

wounded Confederate soldiers, and for 
other local purposes, that the holders of 
her land scrip can get no satisfaction. 
As matters stand, the State has the con- 
sideration for the land, but those who 
have her paper can get neither land nor 
money ; and although this condition of 
things has existed for several years, 
during which there have been several 
sessions of her legislature, Texas has 
taken no steps to redress the wrong she 
has done, and there seems to be very 
little desire on the part of either offi- 
cials or citizens that reparation should 
be made or concern about the disgrace 
that attaches to them and to their 
State. 

A very little reflection suffices to 
teach the unreliability of obligations 



54 THE ART OF INVESTING. 

resting upon no more substantial sup- 
port than public opinion. Divided re- 
sponsibilities are always lightly es- 
teemed, while no burdens are so sharply 
felt as those imposed by the common- 
wealth. Tax-payers will shrink from 
public debts, who would never think of 
shirking individual liabilities. National 
pride and the other elements of which 
patriotism is compounded, even in cases 
where there may be no pressure from 
the governments of foreign bond-hold- 
ers, may, and probably will be sufficient 
to protect national agreements, but the 
undertakings of subordinate communi- 
ties need more positive backing. It 
does not follow that there will be no re- 
pudiation because of an honest purpose 
in their contracting. There is always 



STATE OBLIGATIONS. 55 

the possibility of political or other dis- 
turbances that may lead to revulsion of 
sentiment or give demagogues the op- 
portunity to assail the public credit, 
"We are not without illustrations in this 
country. Virginia's bonds at one time 
commanded higher prices than those of 
the Federal Government ; yet they are 
to-day selling at figures far below par, 
and some of them, or the certificates 
representing them, can be purchased for 
a few cents on the dollar. That they 
and State debentures generally, when 
all the contingencies attending them are 
considered, should bring as liberal prices 
as they do, is the only thing about it 
that is surprising. Such securities, in 
the writer's judgment, are, at present 
quotations, beyond all question, the 



56 THE ART OF INVESTING. 

dearest investments we have in the 
market. 

Municipal Obligations. 

What lias just been said concerning 
State undertakings is, in part, true of 
these. How ready our minor communi- 
ties are to create debts, and then ignore 
them, has been proved by very many 
illustrations, some of them of recent 
date. With the revival of general busi- 
ness at the close of the war, came a 
period of rapid development in some of 
the newer parts of the country. Nu- 
merous railways were projected, and 
municipalities were called upon to aid 
in their construction by the donation of 
bonds. The market was soon flooded 
with them, particularly from the States 



MUNICIPAL OBLIGATIONS. 57 

of Illinois, Missouri, Kansas, Arkansas, 
and their immediate neighbors. But 
the enthusiasm that led to their creation 
was quickly succeeded by disgust when 
the burdens they imposed began to be 
felt. Many were repudiated, and, but 
for fear of the courts, that would have 
been the case practically as to all. In 
Missouri a Repudiators' State conven- 
tion was held, and resolutions denying 
all moral responsibility on account of 
municipal issues, and advising general 
legal resistance, were published to the 
world. Nearly one half of the indebted 
cities, counties, and towns of Illinois and 
Kansas denied their liability, and in Ar- 
kansas repudiation was universal. Nor 
were there lacking such examples in the 
East. Very many investors who had 



58 THE ART OF INVESTING. 

put their money into the rejected bonds, 
became frightened, and sold out at what- 
ever figures they could get. The aggre- 
gate loss was very great. 

Nor are such cases at an end. The 
writer has before him, as these pages 
are being prepared, a number of certifi- 
cates of indebtedness recently put out 
by one of the best-known and most 
wealthy counties of Colorado. One of 
the warrants was issued in payment for 
furniture for the local court of justice, 
several for salaries of county officials, a 
number for witness-fees, etc. All were 
created for purposes entirely proper and 
necessary, and yet payment is absolutely 
refused. 

As a general thing, repudiated mu- 
nicipal undertakings, being sustained by 



MUNICIPAL OBLIGATIONS. 59 

the courts, have in the end been paid or 
compromised; but many of them have 
been defeated on technical grounds, and 
proved wholly worthless in innocent 
purchasers' hands. The wealthy capital 
of the State of Kansas, to the State's 
disgrace as well as her own, has to-day 
outstanding $100,000 of bonds which 
she does not pay because the courts 
have held that she can not be legally 
compelled to pay them! Everybody 
has heard of the case of Memphis, Ten- 
nessee, which, in order to escape pro- 
ceedings for the enforcement of her obli- 
gations, got her charter repealed, and 
ceased to be an organized city. 

What has been said concerning the 
moral strength, or rather moral weak- 
ness, of State bonds, will apply with 



60 THE ART OF INVESTING. 

equal force to those put out by munici- 
palities. The people in the one case 
are no more honest than in the other ; 
and local pride, except on the part of a 
few leading commercial cities, in such 
matters counts for very little. Never- 
theless, as will be seen, municipal obli- 
gations have an important element of 
security that State issues do not possess. 
Their collection, provided they are prop- 
erly created, can be legally enforced. 
But this fact should be accepted for no 
more than it is worth. While the bulk 
of the paper put out by our municipali- 
ties is undoubtedly good, the only safe 
course in buying it, in very many in- 
stances — possibly a majority — is to pro- 
ceed upon the assumption that payment 
will not be made if it can be avoided, 



MUNICIPAL OBLIGATIONS. 61 

and to graduate prices as well as adopt 
precautions in accordance with that 
view. The aspect of the matter pre- 
sented is not particularly charitable or 
flattering; but, whoever invests his 
money on a different one, runs an excel- 
lent chance of losing it. 

Hence, in taking municipal securi- 
ties, it will be seen how important it is 
that all points affecting their validity 
should be inquired into. One of the 
first questions to be settled is whether 
they have been the subject of litigation, 
and what, in that case, has been the re- 
sult. Another is whether they belong 
to the original issue, or have been put 
out in settlement of an earlier and dis- 
puted series. Compromise municipal 
bonds have generally been good, al- 



62 THE ART OF INVESTING. 

though there have been instances in 
which even they have met with opposi- 
tion from their makers. Fortunately 
for later buyers, the litigation affecting 
municipal undertakings has been so ex- 
tensive that nearly all questions that can 
possibly involve their validity have 
been passed upon by the courts, and it 
is not, therefore, now a difficult matter 
to determine, if reasonable prudence is 
exercised when such securities are of- 
fered, whether they will stand the legal 
test. But, of course, legal considerations 
are not the only ones to be studied. 
The pecuniary responsibility and gen- 
eral credit of the contracting communi- 
ties should not be overlooked. 

The importance of the position 
among investments that is held by mu- 



MUNICIPAL OBLIGATIONS. 63 

nicipal issues is apparent as soon as we 
consider the formidable sum which, in 
the aggregate, they make up. In 1880, 
according to the census taken that year, 
they amounted to $871,507,373. But, 
enormous as that figure appears to be, it 
was considerably short of the actual to- 
tal, because very many issues were then 
repudiated or in litigation, and, their va- 
lidity being denied, they were not re- 
ported to the census-takers by the 
makers of them as any part of their 
debts. The most of them have been 
sustained, and with them and the addi- 
tions that have since been made in new 
undertakings, the present aggregate 
would doubtless considerably exceed a 
thousand million dollars. A great deal 
of investment capital is, therefore, in 



64 THE ART OF INVESTING. 

them. In the main it is well and profit- 
ably placed. As our cities and other 
municipalities grow in wealth, and popu- 
lation, they become better able to take 
care of the paper they have out ; partic- 
ularly as their debts of late years have 
not increased as they formerly did. A 
number of the States have by constitu- 
tional enactment prohibited their com- 
munities from making donations of 
bonds to railroads and other corporate 
enterprises, and others have so re- 
stricted them that the worst abuses of 
the practice are no longer possible. On 
the whole, if proper precautions are 
taken by the buyers, municipal paper 
may now be looked upon as one of our 
safest and most remunerative invest- 
ments. 



RAILROAD MORTGAGES. 65 

Eatleoad Moktgages. 

We have now come to a class of 
securities in which by far the greatest 
amount of money lias been invested; 
much, of it permanently, as the class 
under consideration has been the grave- 
yard of a vast aggregate of capital. An 
idea of the volume of interest-bearing ob- 
ligations predicated upon railway prop- 
perty in this country can be formed 
when it is known that, at the time these 
pages are written (1887), our operated 
railroad lines, all told, foot up not less 
than one hundred and thirty -three thou- 
sand miles. The portion that is unen- 
cumbered is so small as to be scarcely 
worth considering. The average funded 
indebtedness is about $30,000 per mile, 



66 THE ART OF INVESTING. 

or, in all, $4,000,000,000. But that 
figure, enormous as it is, by no means 
tells the whole story. So many rail- 
roads have been foreclosed and sold 
under one series of bonds, that they 
might be used in reorganization pro- 
ceedings as a basis for another issue — 
the process in some cases being several 
times repeated — that it would proba- 
bly be no exaggeration to say that the 
liability, one time or another created, 
would average nearly $50,000 per mile, 
or a grand total of $6,000,000,000. 

As our railways, with few excep- 
tions, are valuable and productive proper- 
ties, they furnish an excellent security 
for interest-bearing paper, provided al- 
ways that they are properly managed 
and not overburdened with debt. There 



RAILROAD MORTGAGES. 67 

are at all times good railroad bonds in 
the market; the trouble is, that there 
are poor ones there also. How is the 
investor to discriminate between them ? 
When the mortgages are on roads that 
have been in operation for considerable 
periods, there is little difficulty in reach- 
ing safe conclusions. The principal 
question involved is that of earning 
capacity, considered in connection with 
amounts of funded liability, and our 
railroad manuals furnish all needed 
data on those points. Of course, there 
is always a danger from rival enterprises 
in the shape of " paralleling " lines, 
and possibly a greater one from speculat- 
ing directors, who are willing to wreck 
the properties intrusted to their charge ; 
but the peril is small in comparison 



68 THE ART OF INVESTING. 

with the interests involved. The puzzle 
is when it comes to the paper of new 
roads — of roads that are in course of 
construction or just completed — and gen- 
erally by far the greatest amount of 
railroad bonds offering in the market 
is of this description. Here the earn- 
ings guide-board is lacking. By what 
rule or rules is the investor in such 
cases to govern himself ? — because many 
of the new securities are good, and as 
they can be had at lower figures than 
old ones, when properly sifted from the 
others they offer bargains that should 
not be neglected. The answer involves 
a brief description of the prevailing 
methods of railway construction. 

It is quite within bounds to say that 
the principal incentive to the building 



RAILROAD MORTGAGES. 69 

of railroads nowadays is the expecta- 
tion of making profit out of their con- 
struction. The time for making roads 
at a sacrifice to their projectors, and 
because they are wanted by the public, 
has gone by. Railroad-building is now 
a regular industry — as much so as the 
erection of houses or the manufacture 
of machinery. When a new railway 
enterprise is undertaken, its authors ex- 
pect to make the road not only supply 
funds for its own construction, but to 
leave them a handsome balance over. 
This is accomplished by mortgaging the 
property to that extent that the bonds 
can be sold for more than it will cost. 
In that case they are veiy likely to 
exceed in amount, although not always 
necessarily so, the security on which 



70 THE ART OF INVESTING. 

they rest ; in other words, be composed, 
in good part, of "water." Default in 
the payment of interest, and the bank- 
ruptcy of the enterprise, are the usual 
consequences. What follows is matter 
of routine. The property is put into 
the hands of a receiver, the securities are 
effectually discredited — perhaps bought 
up by a syndicate of crafty speculators 
— and then the work of reorganization 
is entered upon. The reorganizing of 
broken-down railroads has become an- 
other regular and profitable business. 
Calculation is made to determine on 
how many obligations the property can 
earn interest, and it is arranged to re- 
issue for that amount, the old securities 
being proportionately exchanged and re- 
tired. Their holders, who are usually 



RAILROAD MORTGAGES. 71 

glad to save something out of the wreck, 
are expected to accept bonds for a 
smaller face value, and probably at a 
reduced rate of interest, and at the same 
time meet a cash assessment to cover 
the cost of the operation. They not 
only have the water squeezed out of 
their holdings, but they have to pay 
for the squeezing. 

The lesson to be drawn from the 
foregoing facts is easily stated. Let 
the investor, before he purchases, ascer- 
tain whether the bonds offered him are 
secured on a road that has gone through 
the reorganization process; and if not, 
unless he feels that he is compensated 
for the risk he takes by a great reduc- 
tion in price, he had better keep his 
money, or find some other place for it. 



72 THE ART OF INVESTING. 

Reorganization is almost certain to come 
sooner or later. It is the rock ahead. 
There are exceptional cases, of course, 
and if the investor has the means of 
making a thorough investigation, he can 
take advantage of them; but he ought 
to be very sure of the ground before 
venturing upon it. 

Railroad Stocks. 

Of course, many of these are good, 
and a great deal of money is profitably 
invested in them ; but, as a rule, rail- 
way bonds, while at times possibly not 
yielding as liberal returns, are much to 
be preferred by ordinary capitalists. 
There are many things endangering 
stocks that do not threaten mortgage 
bonds. The latter are secured upon 



RAILROAD STOCKS. 73 

property that is permanent, but the 
value of stocks rests upon management 
that is subject to constant change. The 
ambition of railroad directors is even 
more to be dreaded than their dishon- 
esty. How many magnificent railway 
properties have been ruined by the sui- 
cidal policy of extending roads, adding 
branches or taking on leased lines ! 
More particularly has this been the case 
when their stocks are listed at some 
exchange, and their managers happen 
to be operators there. The temptation 
to increase or diminish quotation values, 
for speculating purposes, is then a 
constant menace to conservative share- 
holders. The fact that a stock pays 
dividends, which is the only thing that 
the most of investors look to, is no cer- 



74 THE ART OF INVESTING. 

tain criterion of value unless the con- 
trol of tlie property can in some way 
be satisfactorily guaranteed. 

Other Stocks. 

Of these there is no end. The tend- 
ency of business, owing partly to an 
abundance of capital and partly to in- 
creasing competition, is to a large scale 
of operations, if not to absolute monop- 
oly. One consequence is, that it is more 
and more passing from private parties 
into the hands of corporations. Cor- 
porations issue stocks, and sometimes 
that is one of the leading purposes of 
their formation. Some of the stocks 
are good and a good thing to have, and 
others are wholly worthless. No rule, . 
beyond the exercise of common sense, 



OTHER STOCKS. 75 

and the use of diligence in acquiring 
reliable information, can be given for 
their selection. Some dangers, however, 
can be pointed out. The greatest of 
these is the temptation of large divi- 
dends. Investors are altogether too 
prone to accept present realizations as 
evidences of future profits. It may be 
taken as a rule that, in this age of 
plentiful money, no legitimate business 
that is open to public competition will 
long pay exceptionally well. The greater 
its earnings at first, the stronger will be 
the competition in the end. Hence we 
find that many manufacturing compa- 
nies, especially in New England, that 
made handsome returns to their share- 
holders for considerable periods, have 
gradually ceased to pay dividends at 



76 THE ART OF INVESTING. 

all, or been forced into liquidation. If 
not strictly a legitimate business, any- 
thing in the nature of profits must be 
deceptive. 

When corporations enjoy monopolies 
by virtue of patent rights, their earnings 
have often been very great, and early 
investors have made splendid^ fortunes. 
Those who come later, however, take 
chances that are too frequently under- 
estimated. There is always the danger 
of new discovery. Gas is threatened by 
electricity, the telegraph by the tele- 
phone, and even steam is menaced by 
new-fangled motors. Turnpikes and ca- 
nals have been superseded by railways, 
and old railroads may at any time suffer 
from the competition of new ones. An- 
other fact which is too often lost sight of 



OTHER STOCKS. 77 

is that investing in a patent right, or in a 
business founded upon it, is like invest- 
ing in a mine that is being constantly 
worked out. Every hour shortens its 
monopoly. But the greatest danger in 
such cases is over-capitalization. Such 
stocks nearly always contain too much 
water, and water invariably tends to 
lower levels. 

In handling shares the highest art is 
in selling rather than in buying. That 
is something that the most of investors 
do not understand. They hold on too 
long. When they have a good thing, 
they infer that it will always remain so, 
and accordingly retain it until its value 
has departed or greatly deteriorated. 
Stocks require constant watching. If 
any one wants to go to sleep on his in- 



7% THE ART OF INVESTING. 

vestments lie had better select mort- 
gages. 

While it is true that numerous stocks 
are very much like lottery-tickets — a 
good many of them, and among them 
the shares of mining companies, from 
the very nature of the case — and deal- 
ing in them is a species of gambling, 
the observation is not true as to all. 
The law watches over some of them in 
a way to protect them from the most 
obvious dangers. For that reason, bank- 
stocks can generally be relied upon as 
representing actual cash investments. 
In some of the States the same thing 
is true of insurance companies' shares. 
Efforts have even been made, in certain 
quarters, to apply the rule . to all cor- 
porations; but, as the corporation laws 



FARM MORTGAGES. 79 

of other States are generally open for 
anybody to organize under, such restric- 
tions have little practical value. In 
acquiring stocks, it is always well to in- 
quire — a point generally overlooked — 
under what statutes the companies have 
been organized. If they are found to 
exist by virtue of the corporation laws 
of States that are notoriously lax in 
their requirements — especially if their 
corporators are residents of other States 
— the presumption is against them. 
There is pretty certain to be bad faith 
in their inception, and a bad beginning 
is likely to make a bad ending. 

Faem Moetgaoes. 
We have now reached a class of 
securities that has been steadily grow- 



So THE ART OF INVESTING. 

ing in popularity, and more and more 
has absorbed the capital of investors. 
That it must have merit is a fair infer- 
ence. All things considered, it is doubt- 
less the best now offered on a large 
scale. Land in this country is steadily 
appreciating, except in a few of the 
older sections. There is no reason to 
apprehend, at least for years to come, a 
turn in the tide. Hence, paper resting 
upon landed security, especially in the 
newer and more rapidly-developing dis- 
tricts, if properly graduated in amount, 
is almost certain to be good. What is 
required is sufficient care and judgment 
in placing the loans ; and so complete is 
the system applied by some of the parties 
that make a business of putting mort- 
gages upon land, in apportioning their 



FARM MORTGAGES. 81 

money allotments to the market values of 
property, that they can be accepted with 
even greater confidence than if arranged 
by capitalists themselves. Hence many 
savings-banks and other institutions of a 
fiduciary character, as well as numerous 
conservative individual investors, have 
put their money into paper secured on 
farming-lands, and lands which they 
have never seen, and had no opportu- 
nity to see. 

At the same time it must be remem- 
bered that, if the strictest good faith 
is not observed, there is here a danger- 
ous opening for fraudulent imposition. 
Should there be collusion between the 
loaning agent and the land-owner, the 
advance may be in excess of what is 
justified by the value of the realty, or 



82 THE ART OF INVESTING. 

the title to the latter may be defective. 
The surprising thing is, when the popu- 
larity of farm-mortgages and the extent 
to which they have been dealt in are 
considered, that cases of deception have 
not been more numerous. As it is, they 
have not been wholly wanting. The 
writer once had occasion to visit what 
was called a farm, and as such had been 
made the basis for a loan, in one of the 
newer States. He found a piece of prai- 
rie-ground on which there were signs 
of occupancy at some considerably ante- 
rior period ; but which was then deserted, 
and to all intents and purposes wild 
and waste. It was worth no more than 
land in the same neighborhood, on which 
there had been no attempt at improve- 
ment, and that could be purchased for 



FARM MORTGAGES. 83 

less to the acre than the mortgage upon 
this property. . The owner, having se- 
cured such a liberal accommodation 
through the carelessness or knavery of 

some loaning agent or dealer in mort- 
em o 

gages, had pocketed the money instead 
of expending it on his place, and left 
the ground for his creditor to make the 
most out of that he could. Competi- 
tion among professional money-lenders 
in some of the Western States has be- 
come so sharp that such cases are not 
only possible but probable. Villages 
away out on the frontier, with scarcely 
sufficient population to make respect- 
able settlements, are often the sites of in- 
vestment companies — sometimes of sev- 
eral of them — doing business under most 
pretentious names, and offering amounts 



84 THE ART OF INVESTING. 

of paper that, in view of the surround- 
ings, are truly marvelous. Nothing 
which, by the most liberal interpreta- 
tion, can be called a farm, seems to es- 
cape them. The writer was not sur- 
prised, when told by "one of the na- 
tives " of a border community, that 
there was not a hen-coop in his part 
of the country that did not have a mort- 
gage on it! 

One of the devices of these enter- 
prising companies is to offer their own 
guarantees as to both principal and in- 
terest of all mortgages negotiated by 
them. It is hardly necessary to ask 
what, in a majority of cases, such in- 
dorsements are worth. The writer 
knows of one company that claims a 
capital of only thirty thousand dollars, 



FARM MORTGAGES, 85 

and it is doubtful if half that amount 
were ever in its treasury, which, by its 
own profession, has disposed of indorsed 
mortgages amounting to several million 
dollars. The only safe policy, in buy- 
ing paper of this description, is to deal 
with parties of known responsibility in 
the business, and that have reputations 
which they will naturally be most anx- 
ious to protect. There are a number 
of such concerns, and it is here unneces- 
sary to mention them. Some of them 
are individual operators, some business 
firms, and some incorporated institu- 
tions with large resources that make a 
specialty in this line. It would not 
seem to make much difference which 
is dealt with, although when the loans 
have a good while to run, and the in- 



86 THE ART OF INVESTING. 

terests to be watched over are at a dis- 
tance, prudence would suggest, in view 
of the uncertainty of human life and 
the many vicissitudes that fortune has 
in store, that it would be wise to deal 
with parties having the elements of 
greatest permanency, and which are 
likely to be corporations. 

It is scarcely necessary to add that, 
in selecting investments of this sort, 
there is a choice apart from the market 
values upon which they are secured. 
What is wanted is, not merely safety as 
to the principal of the loan, but regular- 
ity in the payment of interest. In sec- 
tions where only one crop is depended 
on by agriculturists, such as wheat or 
cotton, there is greater danger of de- 
faults from natural causes than in dis- 



FARM MORTGAGES, 87 

tricts where there is a variety of produc- 
tions. Then, there is a difference in 
populations. Some have sounder no- 
tions as to financial obligations than 
others. It is hardly to be expected that 
individuals in communities that repudi- 
ate or neglect public debts, will be shin- 
ing examples of personal integrity. It 
will always be well to give the go-by to 
repudiating districts. Apart from the 
general lack of sound business ethics in 
such localities, there is a reason why it 
is unsafe to trust the monetary contracts 
of their people, and that is the danger 
to be apprehended from unfriendly col- 
lection laws. When communities take 
to fighting creditors, they are not likely 
to confine their opposition to any one 
class. By means of exemption laws, 



88 THE ART OF INVESTING. 

stay laws, limitation laws, assignment 
laws, etc., they can make it almost as 
difficult to collect from individual debt- 
ors as from the public, and, as a matter 
of fact, we find legislation of tliat sort 
most pronounced wherever common- 
wealth and municipal undertakings are 
least respected. For instance, Texas, in 
selling her lands to outsiders, and then 
converting them to the uses of her own 
institutions and citizens, as heretofore 
described, has shown an utter disregard 
of all moral obligations, and here it is 
that the laws have been apparently 
made with special reference to protect- 
ing local debtors from the clutch of out- 
side creditors. In the most of the 
States a sealed instrument for the pay- 
ment of money is good for twenty years, 



FARM MORTGAGES. 89 

but in Texas, if not sued on in four 
years/it is barred by "the statute"; and 
thousands of people having claims 
against Texans, have permitted them to 
be lost through ignorance of that pecul- 
iar provision. Again, in Texas a man 
may possess a great deal of valuable 
property and yet be execution-proof. 
In addition to "all provisions and for- 
age on hand for home consumption," all 
household and kitchen furniture, all im- 
plements of husbandry, all tools and 
apparatus used in a trade or profession 
actually followed, family portraits and 
pictures, a gun, two horses and a wagon, 
a carriage or buggy, five milch-cows and 
calves, two yoke of work-oxen, twenty 
hogs, twenty head of sheep, all bridles, 
saddles, harness, etc., the debtor head of 



90 THE ART OF INVESTING. 

of a family may hold a homestead, not 
in a town or city, of not less than two 
hundred acres of improved land, or in a 
city, town, or village, of lots of the 
value of five thousand dollars, "without 
reference to the value of improvements 
thereon," and which, of course, may be 
worth much more than the land. In 
Texas, to get moieties under assignments 
made for their benefit, creditors must 
surrender in full their demands — from 
which provisions it may not unreason- 
ably be inferred that Texas is a much 
more healthy region for debtors than for 
creditors. In Colorado, whose repudia- 
tions have also been referred to, a prom- 
issory note may be " outlawed w by two 
years' indulgence on the creditor's part, 
and a judgment of a court of record is 



FARM MORTGAGES. 91 

good for three years only. The moral 
from such cases is obvious enough. 
Keep your money out of Texas, Colo- 
rado, and other repudiating sections if 
you ever want to see it again. The 
higher rates of interest to be obtained 
in such localities, and which are among 
the penalties for their treatment of 
those with whom they have dealing, 
will not compensate for the increased 
risk. Nor would it be imprudent to 
avoid cities and towns of tainted finan- 
cial records, however prosperous they 
may appear to be, of which the capital 
of the State of Kansas, whose course is 
elsewhere considered, is, by reason of 
its wealth and prominence, a notable 
example. 



92 THE ART OF INVESTING. 

Kakch Securities. 

Akin to the obligations just treated 
of, because having a basis in real estate, 
and yet in so many points differing 
from them as to seem to call for their 
consideration under a different heading, 
are securities predicated upon ranch- 
properties. Cattle-raising, which, in ear- 
lier times, was looked upon as a part 
of the farmer's regular occupation, has 
of late become almost a separate indus- 
try, and grown to enormous propor- 
tions. Ranching, however, is not con- 
fined to cattle-production, as the term 
" cattle " is ordinarily understood. We 
now have sheep-ranches, horse-ranches, 
pig-ranches, goat-ranches, and even os- 
trich- and goose-ranches. The marvel- 



RANCH SECURITIES. 93 

ous growth of the ranch, business, in 
quite recent times, has had the natural 
effect of bringing upon the market a 
class of securities that has absorbed, and 
unfortunately dissipated, a good deal of 
investment capital. For a time the busi- 
ness was remarkably profitable. Lands 
in the South and West, in large bodies, 
were obtained at nominal figures — often 
by mere appropriation — to operate them 
as ranches cost but a trifle; for, as a 
rule, neither houses nor fences were con- 
structed or needed; and the prices of 
cattle, largely purchased for the pur- 
pose of stocking other ranches, were 
high and constantly advancing. Every- 
body in the business made money, or 
seemed to be making it. Speculation 
upon an extended scale was an inevita- 



94 THE ART OF INVESTING. 

ble consequence. Stock-ranching com- 
panies — "stock "in the corporate sense 
— were soon being numerously or- 
ganized with the usual concomitants 
of mortgage-bonds and share-certificates, 
and, of course, the public was invited 
to share in their benefits. Circulars 
that they put forth told very flattering 
tales. The lands which they possessed, 
often little better than desert wastes, 
were usually described as worth from 
five to twenty-five dollars per acre ; their 
cattle were estimated at the highest 
market prices ; and calculations were 
gone into to show, from the increase of 
their herds and the quantities of beef 
and young stock to be annually har- 
vested, that they could not fail to be 
first-class bonanzas. The highest rates 



RANCH SECURITIES. 95 

of interest and most liberal dividends 
were promised. It is no wonder that 
a good many investors were captivated. 

We all know what the result has 
been. Droughts in summer and frosts 
in winter, for which no allowance had 
been made, and against which no pre- 
cautions were taken, wrought havoc 
with the herds, and production increased 
until the ranges were overstocked, and 
prices went down and down with grow- 
ing competition until the end was fail- 
ure and bankruptcy. 

And yet it by no means follows that 
ranch securities will always be worth- 
less. Stock-raising is an entirely legiti- 
mate calling, and will be successfully 
prosecuted on a large scale, upon our 
Western plains and prairies, which are 



96 THE ART OF INVESTING. 

by nature intended for that particular 
use. After such, arrangements have 
been made for shelter and feed in the 
winter, and for water in the summer, 
as ordinary prudence dictates, and the 
business is brought to that stage where 
it will no longer be conducted by " cat- 
tle-kings " and " cattle-queens " as a ven- 
ture to be decided by the chances of the 
weather and the market, but by ordi- 
nary workers, content with moderate 
profits, and mindful of all the oppor- 
tunities and economies, ranching will be 
a reasonably safe basis for money in- 
vestments of all kinds. 

Water- Woeks Loans. 
These are becoming very plentiful — 
how plentiful may be inferred from the 



WATER- WORKS LOANS. 97 

fact that a directory of water- works for 
towns and cities in the United States, 
recently issued by a New York pub- 
lisher, shows that of over fourteen hun- 
dred such establishments, the number 
of those owned and conducted by pri- 
vate (although incorporated) companies 
exceeds those belonging to the munici- 
palities by over one hundred and fifty. 
The communities served by these com- 
panies range from villages of less than 
two thousand population up to a city of 
one hundred and twenty-five thousand 
souls ; and the debts of the companies, 
in nearly all cases represented by coupon 
bonds, run from twenty-five thousand 
up to four million dollars. As the 
stock issued by the companies fully 

equals their bonds, it will be seen that 
9 



98 THE ART OF INVESTING. 

the aggregate of securities put out by 
them is very great. 

The building of water- works has be- 
come a regular business, and has been 
followed with very satisfactory results 
by contracting parties that, in many 
instances, are owners of or interested 
in the factories producing the pipes, 
pumps, and other materials and machin- 
ery necessarily used. The customary 
method has been to secure, in the name 
of an incorporated company, that is 
merely a cover for a professional builder, 
a contract with a city or village by 
which it is to be supplied with water 
for public uses — protection against fire 
being the principal one — at a stipulated 
annual price, or for so much per hy- 
drant, with the privilege of selling 



WATER- WORKS LOANS. 99 

water at specified rates to as many pri- 
vate takers as can be found. The con- 
ditions vary, but a supply of good, 
wholesome water, in adequate quanti- 
ties, is always one of them. A failure 
on this point is to invalidate the con- 
tract, and there may be other grounds 
of forfeiture. 

For the money with which the works 
are to be constructed, the builder ordi- 
narily depends, sooner or later, upon 
the sale of bonds. He even expects to 
have a balance left from their proceeds 
when the work is done, and that, with 
the stock of the company, which may 
or may not have a value, is to be his 
profit. The works, in other words, are 
relied upon to build themselves, and 
pay the enterprising projector besides, 



ioo THE ART OF INVESTING. 

there being in this respect no difference 
as to the construction of railroads and 
water systems. 

The writer has before him a pam- 
phlet put out by a dealer in invest- 
ments, in which water-works securities 
are especially commended. " In no other 
class of mortgages," says the pamphlet, 
" can so many and such strong elements 
of safety be found, since in the whole 
* history of water-works there is but one 
known instance of the foreclosure of a 
first mortgage (where the works were 
completed and in operation), and in that 
instance not a dollar of loss was sus- 
tained by the bondholders." While the 
author of the foregoing could not have 
been familiar with the case of Mem- 
phis, Tennessee, in which the unfortunate 



WATER-WORKS LOANS. 101 

water-works bondholders received less 
than twenty per cent of their demands 
from the proceeds of the foreclosure 
sale, nor of those of Galesburg, Illinois, 
and other bankrupt companies, there 
are, nevertheless, reasons why water- 
works mortgage-bonds, if issued under 
proper conditions, should be among the 
very best. They are secured on prop- 
erty (underground pipes, etc.) which is 
but little exposed to fire and accidental 
injuries, and the business upholding 
them is usually without competition, 
conducted wholly for cash, and in grow- 
ing communities must of necessity in- 
crease. But there are perils and draw- 
backs. There is here, as elsewhere, the 
possibility of overbonding. A greater 
danger is cheap construction. In no 



io2 THE ART OF INVESTING. 



class of works, perhaps, is there an equal 
liability in this direction. The most of 
the material used is in pipes that are 
buried and out of sight. It is possible to 
employ an inferior article, such as sheet- 
iron instead of cast-iron, which will tem- 
porarily answer the purpose ; and as the 
builder's interest in the works, after 
their acceptance by the community with 
which he has contracted — usually not as 
critical as it should be — and the sale of 
his bonds and stock, is at an end, the 
temptation besetting him is very strong. 
Five or six years is the limit to the 
probable use assigned by engineers to 
pipes and other materials in works 
that the writer knows of, that are cov- 
ered by mortgages authorizing bonds 
having from twenty to twenty-five years 



WATER-WORKS LOANS. 103 

to run. If, at any time before the 
bonds mature and are satisfied, it is 
found necessary to use the funds needed 
for principal or interest, in the reconstruc- 
tion of the property, it is easy to see 
how the bondholders may suffer. Hence 
to them the very great importance of 
knowing, before they part with their 
money, sundry points about the security 
they are getting, that the most of bond- 
purchasers rarely think of inquiring into. 
Nor have we reached an end of the 
risks attending this class of securities. 
The question of water-supply is always 
of first importance. Water- works with- 
out water, and plenty of it, are, of 
course, of very little account. Now, it is 
very easy to understand how difficulties 
on this score may arise and increase. 



104 THE ART OF INVESTING. 

When works are first constructed, there 
may be a sufficiency of water of satisfac- 
tory quality within easy reach, and the 
builder, anxious to get through with his 
work as quickly and cheaply as possible, 
that he may realize on it, will naturally 
avail himself of such supply and look no 
further. But it does not follow that it 
will always or for a considerable time 
be adequate. Running streams are usu- 
ally depended on, and everybody knows 
how liable they are to become corrupted 
in a settled country, and, while the de- 
mand upon them is increasing their vol- 
ume is likely to diminish. The writer 
knows of more than one company that 
on this point has met with embarrass- 
ments not dreamed of when its opera- 
tions were begun. In one instance 



WATER-WORKS LOANS. 105 

the cost of a new water-supply, made 
necessary by the deterioration of a run- 
ning stream, exceeded the entire origi- 
nal outlay. The point is one upon 
which, in every instance, not only are 
contracts made especially stringent, but 
a strict compliance is certain to be 
demanded. How many of our water 
companies will be able to meet their ob- 
ligations in this regard, during the pe- 
riods that their bonds are issued for, 
without the expenditure of considerable 
sums of money not at first anticipated ? 
To provide a fresh water-supply may 
prove a more serious undertaking even 
than the substitution of a new plant for 
an old one. 

When securities founded upon water- 
works in localities where they are actu- 



io6 THE ART OF INVESTING. 

ally needed, and erected under seem- 
ingly favorable conditions, are attended 
with sucli liabilities, it will be seen how 
much greater the danger must be when 
the works are located, by speculative 
builders, in communities that do not 
need them, and of uncertain ability for 
their support, purely as a basis for the 
manufacture of bonds and stock. The 
country has been ransacked for water- 
works sites, and plenty of works have 
been built in villages that the majority 
of our people have never heard of. 
They may grow and become important 
places, and they may not. The obliga- 
tions created in such cases may be valu- 
able, and they may not. But it is quite 
safe to say that, if the movement in this 
direction continues and goes much fur- 



STREET-RAILWAY BONDS. 107 

ther, the day is not far off when we will 
be favored with a plentiful crop of de- 
faults and water-works foreclosures. 

Stkeet-Railway Bojsds. 
Much that has been said concerning 
water-works securities is applicable to 
these. There is not the same opportu- 
nity to delude by the use of inferior 
materials, since the works are on the 
surface ; but there has been an equal dis- 
position to push construction into terri- 
tory of doubtful earning capacity. Many 
roads have been built where they were 
not needed, and where they can not 
pay — at least, for considerable periods 
to come ; and more of that sort are like- 
ly to be built. At the same time, when 
advantageous locations have been se- 



108 THE ART OF INVESTING. 

cured, with franchises properly covering 
the ground, and particularly if exclu- 
sive, few better properties exist, and 
tlie securities based upon them can be 
safely recommended. All the investor 
needs to do is to investigate thoroughly 
before he buys. He should satisfy him- 
self that the road is in a community 
that is able to sustain it; if in a city 
of known standing, that it occupies 
streets likely to give it permanent busi- 
ness, and has not been built in remote 
suburbs or along country highways as 
a pretext for bond-making; that its 
franchise is sufficient to protect it from 
dangerous competition; that the securi- 
ties have been legally issued ; and, above 
all, that there are not too many of 
them. 



MISCELLANEOUS BONDS. log 

Miscellaneous Bonds. 
Much that has been said concerning 
water-works and street-railway mort- 
gages is applicable to various other se- 
curities, notably those of gas and elec- 
tric-light companies. In cities and vil- 
lages, when the latter are of considera- 
ble size, streets must be lighted, and con- 
tracts for the purpose are always sought 
by those contemplating the construction 
of illuminating-works. Such contracts 
are usually for short periods, one year 
being the ordinary term, and for that 
reason there is greater danger from 
competition than in the matter of water- 
supply. Indeed, gas and electricity are 
likely to be competitors in most fields 
for a considerable time to come, and 



no THE ART OF INVESTING. 

the profits from their operations must 
be correspondingly abridged. Never- 
theless, many of the securities predi- 
cated upon them should be good, and, 
if selected with care, can be taken with 
confidence. Of course, there may be 
defective construction in material and 
workmanship, and the buyers of gas- 
light and electric-light bonds would do 
well, before parting with their money, to 
inform themselves thoroughly on these 
points as well as others. In the larger 
cities there is less difficulty in estimat- 
ing securities of the kind, as they are 
pretty certain to have local quotations 
that determine their values for the time 
being. 

When it comes to bonds secured on 
manufacturing and other private proper- 



MINING SECURITIES. in 

i 

ties, which may or may not be covered 
by articles of incorporation, no general 
rule can be laid down. Each interest 
must be measured by its own circum- 
stances, and investors can best deter- 
mine for themselves how far it is safe 
to trust the promises it makes. The 
markets in such cases are always more 
or less local, and those who see fit to 
put their money into them may be sup- 
posed to be in possession of all the facts 
necessary for the formation of correct 
judgments. 

MusnsrG Securities. 
The best thing that, as a rule, can 
be done with these is to let them severe- 
ly alone. There are good mining shares, 
but the average investor, who buys in- 



112 THE ART OF INVESTING. 

to such properties, does not get that 
kind. It is a peculiarity of the mining 
business that it pays only when man- 
aged with exceptional skill, and that 
requires the property to be in the hands 
of its owners. Of course, the average 
investor can not take personal charge 
of the mines into which he buys, and 
would not know how to do it properly 
if he could. He is compelled to intrust 
his interest to the care of hired agents, 
and, if anything is settled in connection 
with mining, it is that about the only 
thing the ordinary salaried mining su- 
perintendent is good for is to draw 
checks on his employers, and bury their 
money beyond the reach of resurrectiono 



BRIDGE-BONDS. 1 1 3 

Beidge-Bo^ds. 

When our larger streams are reached 
by railways, and must be crossed by 
bridges that cost a great deal of money, 
such structures have generally been 
erected by corporations independent of 
or separate from the railroad companies. 
As a general thing, being proximate to 
large cities, they have also been made 
to furnish the accommodations of pub- 
lic highways. Bonds and stocks issued 
upon them, while subject to many of 
the same vicissitudes, are quite as good 
as those of the average of railroad com- 
panies. No general rule can be laid 
down concerning them. Each security 
must stand upon its own merits, as the 
structure upon which it is issued must 



114 THE ART OF INVESTING. 

stand upon its own foundations. There 
should in each case be an investigation 
before buying. One general caution, 
however, may not be inappropriate, and 
that is, to fight shy of the paper of com- 
panies owning very expensive bridges, 
unless the ordeal of a reorganization has 
been gone through. It is well known 
that the New York and Brooklyn 
Bridge, lying between the first and 
third cities in the country, does not 
begin to pay interest on its cost. The 
great St. Louis Bridge failed for the 
same reason, and it is doubtful whether 
such enormous structures can be erected 
at outlays that will justify them merely 
as business ventures and investments. 



SUBSTITUTION SECURITIES. 115 

Substitution Securities. 
Eeference has already been made to 
an ingenious arrangement for issuing 
bonds upon the security of other bonds. 
The plan is comparatively a new one 
in this country, although something like 
it has long been practiced upon in Eng- 
land, and where more than one com- 
pany adopting it has come to grief 
through injudicious investments. In 
itself it is simple enough. Certain per- 
sons having, as they suppose, superior 
facilities for investigating securities of 
one or more kinds, and sifting the good 
from the bad, organize with a view to 
purchasing such as they approve, and 
on the strength of which, when placed 
with some trust company or other safe 



n6 THE ART OF INVESTING. 

depository, they issue their own bonds 
for the market to the same amount, but 
usually bearing a lower rate of interest 
than those which they own, The differ- 
ence in the interest and the lower figures 
at which they may buy, compared with 
those at which they sell, make their 
profits. To escape personal liability, and 
possibly to establish a higher credit, 
a corporation is formed, and the new 
obligations are produced in its name. 

To such investors as lack confidence 
in their own judgments, or either do 
not have or prefer not to avail them- 
selves of satisfactory opportunities for 
investigation on their own account, the 
system undoubtedly has recommenda- 
tions. If securities were scarce and 
- hard to find, it would be generally 



SUBSTITUTION SECURITIES. 117 

popular ; but, as long as they are plen- 
tiful, the majority of investors will pre- 
fer to trust to their own wits and save 
their money. And, after all, the judg- 
ment of one man may be no better than 
that of another, and those having money 
to dispose of, who, while relying upon 
themselves, exercise reasonable prudence, 
will doubtless, as a rule, enjoy the great- 
est peace of mind and occupy positions 
in many respects most satisfactory, 



CHAPTER II. 

SPECULATING* 

New Yoek lias no more entertaining 
public exhibition than its Stock Ex- 
change. It is one of the show-places of 
the city. The visitor who, for the first 
time, looks down from a gallery upon its 
members in the act of transacting busi- 
ness, is astonished at the apparent con- 
fusion he witnesses. He seems to have 
entered a mad-house. The idea that the 
market values of our leading securities 
should be determined by what appears 

* The following chapter appeared in " The Forum ?l 
for October, 1886, under the title of " The Heart of 
Speculation." 



SPECULATING. 119 

to him to be a howling mob of incurable 
lunatics, is incomprehensible. But if 
nothing could be said against the Ex- 
change, which is simply a big bazaar for 
the sale of bonds and stocks, except its 
tumultuousness and the seeming lack of 
dignity among its operators, criticism 
would have in it but an indifferent 
target for its shafts. Much graver ques- 
tions grow out of its existence. Is it a 
harmless institution? Is it a public 
blessing? Is it a public curse? 

As a great central mart for current 
securities, it would be unobjectionable. 
There is no reason why bonds and 
shares should not be publicly dealt in, 
and in large quantities, as well as dry- 
goods; as well as corn and cotton and 
beef and kitchen vegetables. If the 



120 THE ART OF INVESTING. 

Stock Exchange was intended for or re- 
stricted to the hona-fide buying and sell- 
ing of bonds and shares, not a word 
could be justly said against it. But is 
that its business? Unfortunately, no. 
Its chief occupation is wagering on 
stocks : its members, while going through 
the forms of buying and selling, simply 
bet their money, or somebody else's 
money, upon the rise or fall of the 
shares they select, as they would upon 
the shiftings of cards or dice. The Ex- 
change, while having a share of legiti- 
mate business, is chiefly an immense 
gambling establishment. 

Its members are divided into two 
classes — those who execute commissions 
for others, and those who deal on their 
own account. It is needless to say that 



SPECULATING. 121 

among the latter are the boldest and 
sharpest speculators of the day. The 
careers of these men can be sketched in 
very few words. Through the exercise 
of superior native wits or the accident 
of extraordinary luck, they flourish mar- 
velously for a time ; but only, as a rule, 
to lose their heads and their balance at 
last, and go down — often through a sin- 
gle disastrous transaction — faster than 
they went up. There are exceptions. 
Some flourish to the end, dying — gener- 
ally young — or retiring with estates 
unbroken. But they, are exceptions. 
"Wall Street is a place where a few for- 
tunes are made and a great many are 
lost. The stories of its magnificent 
triumphs, and of its equally magnificent 

wrecks, read like tales from the "Ara- 
11 



122 THE ART OF INVESTING. 

bian Nights"; some of them like pas- 
sages from Dante's "Inferno." Wall 
Street lias liad its suicides by the dozen, 
and it will have plenty more. It would 
not be Wall Street without surprises. 
And yet there is a singular sameness in 
the ordinary broker's experience. He 
runs an exciting, if at times a rough and 
stormy, career, snatches or seems to 
snatch a good many pleasures by the 
way, makes and breaks with about equal 
abandon, wrecks his health in a hurry, 
dies early and suddenly, and then — well, 
then, when his affairs come to be settled, 
there are found to be large blocks of 
utterly worthless shares, perhaps a fast 
horse or two, a two-wheeled vehicle and 
trappings to match, some costly souve- 
nirs, and very few solid assets, and the 



SPECULATING. 123 

business is closed in bankruptcy. Poor 
fellow, everybody has forgotten all 
about him ! 

Of the ordinary Wall Street specula- 
tor, however clever or however favored 
for a time, it is perfectly safe to say 
that, if he lives long enough and sticks 
to the business, he will finally come to 
grief. 

But how about Vanderbilt pere, who 
was more or less of a "Wall Street opera- 
tor all his many days, and a few other 
not wholly dissimilar if less conspicuous 
examples ? 

Ah! that brings us to a view of 
some of the interior workings of the 
New York Stock Exchange that the 
public has little conception of, and 
which alone will give a correct under- 



124 THE ART OF INVESTING. 

standing of its real character. The pop- 
ular idea is that the Exchange has upon 
its list, to be dealt in, all, or nearly all, 
prominent stocks and bonds of acknowl- 
edged value, impartially selected and 
solely because of their merits. There 
could be no greater misconception. We 
look there in vain for the shares of the 
Pennsylvania Central, whose stock has 
not a drop of water in it; of the Balti- 
more and Ohio, whose paper, notwith- 
standing some mistakes of its managers, 
is equally solvent ; of the Boston and 
Providence, the Boston and Albany, the 
New Haven and Hartford, the Maine 
Central, and of dozens of other corpora- 
tions whose management is unexception- 
able, and whose securities are among 
the choicest investments. But if there 



SPECULATING. 125 

is a company with a speculating board 
of directors, and whose stock has been 
watered until it will float a respectable 
navy, its shares are pretty sure to be 
found on the Exchange's list. Or if 
there is a company that is absolutely 
controlled and directed by some partic- 
ularly active and conspicuous manipu- 
lator, its stock may be looked for at 
the same place. There has never, ap- 
parently, been any difficulty in a big 
stock operator getting his issues upon 
the list. What has been the result? 
Simply that the most abominable rub- 
bish has been unloaded upon the 
public. 

Much, but not too much, has been 
said in condemnation of stock- watering ; 
of the production of corporate certifi- 



126 THE ART OF INVESTING. 

cates representing little or no cash in- 
vestment, and winch innocent persons are 
led to purchase in the belief that they 
are getting full values. But how is it 
that these fraudulent issues can be mar- 
keted, and the producers escape legal re- 
sponsibility for the impositions prac- 
ticed? Here is where the Exchange's 
work comes in. The Exchange is the 
conduit through which the water is 
safely carried into the investors' pock- 
ets. When it takes the stock upon its 
list, the Exchange becomes practically 
the seller, supplying the machinery and 
the means of transfer, and it guarantees 
nothing. Whoever buys at its board is 
understood to take all risks, no matter 
how much deception is used. He may 
be utterly victimized — often is so — but 



SPECULATING. 127 

he has no redress. Here is the medium 
through which the over-issues have been 
marketed. But for the Exchange's in- 
strumentality, the facilities it has fur- 
nished, those stupendous stock-watering 
frauds which have become historical 
never could have been successfully con- 
summated. 

Once on the Exchange's list, there 
has never yet been a stock so worthless 
that, with a shrewd manipulator behind 
it, it could not be unloaded. The pro- 
cess has been a simple one ; First, there 
are "washed" — singular how the idea 
of water runs through all stock opera- 
tions — or prearranged sales of the stock. 
Outsiders are then told that there is 
money in it, and they begin to buy. The 
stock is duly " supported " — an indispen- 



f28 THE ART OF INVESTING. 

sable precaution — that is, it is taken at 
quotation prices when offered by outside 
owners, and so up and up it is marked, 
the speculative public taking large 
blocks in the belief that it is going 
higher, and with little thought of its 
actual value, until there comes a time 
when, the original supply being ex- 
hausted, the shares are no longer sup- 
ported, and down, down they go. The 
real value of the stock has little to do 
with its negotiation. In the light of 
that explanation, there is no difficulty in 
comprehending how certain great rail- 
road magnates, who are leading opera- 
tors in Wall street, have amassed such co 
lossal fortunes. They have been stock 
manufacturers as well as stock-dealers, 
The New York Exchange has been their 



SPECULATING. 129 

field of operations — their market-place. 
Through it they have sold their wares. 
Had they, like ordinary speculators, con- 
fined themselves to other people's goods, 
it is questionable whether they would 
have grown exceptionably rich. They 
might have become poor, as the most of 
their associates have done. But when, 
with consciences conformable to their 
opportunities, they had the means of 
selling water at high figures and in prac- 
tically unlimited quantities, it is no won- 
der that their fortunes swelled to fabu- 
lous proportions. 

A glance at the Exchange's list tells 
the whole disgraceful story. "What a 
column of tatterdemalions it parades ! It 
looks as if, in making up its assortment, 
the listing committee had gone into the 



130 THE ART OF INVESTING. 

highways and by-ways, witli orders to 
bring in the lame, the halt, and the blind. 
Wabash is there, Denver and Eio Grande 
is there, Hocking Valley is there, Texas 
and Pacific is there, Bloomington and 
Western is there, Nickel Plate is there, 
West Shore is there, the whole noble 
army of frauds that once flourished 
so magnificently and bled the public so 
profusely, is there. Consolidated Gas, 
with thirty-five millions of stock that, 
from official investigation, would appear 
to have been evolved from a cash invest- 
ment of less than twelve millions, is 
there, of course. It is a new accession, 
and shows how naturally inflated and 
adulterated securities seek the Ex- 
change's forum, and how readily they 
are admitted. The Exchange has a com- 



SPECULATING. 131 

mittee to pass upon applications for list- 
ing, and which, in theory, excludes un- 
worthy issues. It is supposed to act as 
a sieve ; but certain it is that, sieve-like, 
it is no obstruction to the passage of 
water. 

While its bond-list, as a whole, is 
much more respectable than its stock- 
list, it is noteworthy that the Exchange's 
dealings are principally in the specula- 
tive issues — the second and third mort- 
gages, the incomes, the land-grants, and 
other junior or discredited securities. 
These are the driftwood of the market, 
which nobody buys to keep, because, 
yielding little or no income, they are of 
no account as investments ; and they are 
bid up or bid down, according to the 
course of speculation at the time. When 



132 THE ART OF INVESTING. 

actual investors wish to buy, as a rule 
they go to bankers and dealers who 
have nothing to do with the Exchange 
and pay very little attention to its quo- 
tations. 

Oh, how gayly the business of mak- 
ing and marketing securities was but re- 
cently going forward in "Wall Street! 
The inflation period that followed the 
depression from 1873 to 1879 was the 
golden era of stock speculation. The 
Exchange fairly rioted in profitable traf- 
fic. The public was supposed to be cry- 
ing for shares, and the magnates of that 
institution were doing their best to meet 
the demand. They succeeded pretty 
well. Some of them built new roads 
and stocked and bonded them for only 
four or five times their actual cost. 



SPECULATING. 133 

They sought strange fields for their vent- 
ures — in the wilderness, upon the des- 
ert plains, among the mountain-peaks. 
They overleaped the national boundaries 
and rushed pell-mell into Mexico; and 
when all available openings were filled, 
they entered upon the work of "paral- 
leling " — constructing new roads by the 
sides of old ones. The purpose of it 
all was the production of paper to be 
dealt in " at the board." It was bonds, 
bonds, bonds ; stock, stock, stock ; wa- 
ter, water, water. Millions upon mill- 
ions of so-called securities were manu- 
factured, costing little more than the 
blank paper upon which they were 
stamped and the mechanical labor be- 
stowed upon it, and dumped into the 
hopper of the Exchange, to be by it 



134 THE ART OF INVESTING. 

stirred up and turned over a few times, 
and then systematically worked off on 
tlie great investing public. 

Very well does the writer, as well as 
a good many others, remember what it 
all came to; how on a bright day of 
May, of the year 1884, pandemonium, in 
the form of a panic, entered Wall Street ; 
how the great throngs that gathered 
there and filled all available spaces 
surged and seethed like troubled waters ; 
how great bankers and leading busi- 
ness men ran wild-eyed and bareheaded 
through the streets ; how mobs of half- 
demented people crowded round broker- 
age-houses, richly -dressed women and 
gray-haired men among them, weeping 
and wringing their hands; how sur- 
rounding the doors of suspected banks 



SPECULATING. 135 

were groups of idlers who, with the true 
instinct of Wall Street denizens, were 
betting their money on the length of 
time their doors would remain open; 
how about the remorseless "tickers" 
in brokers' shops were gathered crowds 
of excited men, tremblingly watching 
the course of stocks that seemed to be 
going down, down to perdition, the wa- 
ter they contained suddenly turning to 
hydraulic pressure to crush them. Those 
who saw that spectacle in all its grim 
and terrible seriousness wiU witness 
nothing to match it this side of the " In- 
ferno." Ah ! the New York Stock Ex- 
change then gave its patrons a treat 
many of them will not soon forget. 

But the Exchange, with all its short- 
comings, is at least useful if not neces- 



136 THE ART OF INVESTING. 

sary in supplying quotable values and 
giving stability and tone to the business 
of tlie country. Is it ? Let us see. On 
the 1st of March, 1884, Delaware, Lack- 
awanna and "Western stock sold on the 
board at 133|-. In January following it 
brought at the same place only 82f. 
The next December it was up to 129|. 
" Lackawanna" is an old, conservative 
company, lightly capitalized, with an es- 
tablished business; a regular, uniform 
dividend-payer. Intrinsically the value 
of its shares has not varied in the past 
five years. " St. Paul " is another stock 
that, apart from speculation, should not 
change. Yet in 1883 it sold "on 
'Change" as high as 108£, in 1884 down 
to 5 8 J, and in 1885 was back to within 
one per cent of par. In one half hour 



SPECULATING. 137 

during the May panic of 1884 the se- 
curities on the Exchange's list shrank in 
quotations over $100,000,000 ; in one 
day nearly $300,000,000. Not much 
stability, not much reliability there! 
Either prices had been much too high 
or they went much too low. The Ex- 
change in the one case or the other, if 
not in both, failed to hold them at the 
proper level. Nor in this is there any- 
thing remarkable. "Wide and sudden 
fluctuations are necessary results of the 
Exchange's methods. Its members are 
supposed to be divided between " bulls" 
and " bears" — those who try to advance 
prices and those who try to depress 
them ; but all are as likely as not at one 
time to be bulls and at another bears. 
They have their stampedes. No drove 



138 THE ART OF INVESTING. 

of cattle upon the Western prairie is 
more subject to sudden scares and er- 
ratic rushes than they are. Indeed, a 
wild herd of steers, with horns uplifted 
and tails in the air, charging across the 
plain, would give but a faint idea of the 
flurries and scurries of "Wall Street bulls 
and bears in the midst of a round-up. 
When the market looks like going up, all 
hands are ready to lift it higher. When 
going down, all are ready to ride it to 
the bottom. The result is, a succession 
of extremes ; and even when the entire 
Exchange is not blindly swayed to one 
side or the other, nothing is more com- 
mon among its operators than the for- 
mation of pools to advance particular 
stocks or of combinations to raid others, 
artificial agencies in both cases being 



SPECULATING. 139 

freely used. How often, or rather how 
seldom, do Exchange quotations express 
the values that stocks would have if left 
to themselves or to the arbitrament of 
supply and demand! 

In these things, as already said, to 
one familiar with Wall Street ways, 
there is nothing remarkable. It is 
upon fluctuations that stock speculation 
fattens. The delight of the regular 
Wall Street man is a wild market — 
the wilder the better. Quick changes 
bring him quick profits. He knows 
that a steady market means a dull 
market, and nothing does he more 
heartily detest. To him the most agree- 
able of all movements is that which 
sends up prices with a rush and a hur- 
rah, creating what, in Wall Street par- 



Ho THE ART OF INVESTING. 

lance, is known as a " boom/' and lead- 
ing outsiders to purchase on tlie rise — 
of course, in the expectation of higher 
figures — and which then lets prices drop 
so suddenly as to shake or scare these 
purchasers out. In that way the broker 
gets both the money and the stocks, 
and the outsider gets a lesson. It is 
the theory of experienced operators, and 
undoubtedly a correct one, that the out- 
side speculator rarely comes into the 
market until prices are up, and he can 
look back and see what he has lost by 
not venturing earlier; and is never so 
ready to sell as when prices are down, 
and he can look back and see what he 
has lost by not getting out sooner. 

Instead of being a balance-wheel to 
the business of the country, the Stock 



SPECULATING. 141 

Exchange is far more likely to be a dis- 
turbing factor. It does not even fur- 
nish trustworthy news. Nowhere is it 
so difficult to get reliable intelligence 
concerning any stock dealt in there, as 
in Wall Street. The inventiveness of 
the speculative broker is something 
marvelous. He can ruin the country 
one hour and save it the next. He 
can blight the crops of a whole section, 
or he can fill the land with abundance. 
He can make war or he can make peace, 
exactly as his momentary interest de- 
mands. Rumor-mongering seems to be 
a part of his trade. He is the chief of 
liars. Perhaps he is the exception 
rather than the rule among his fellows 
— it is to be hoped that he is — but he is 
a pretty numerous exception, for all that ! 



142 THE ART OF INVESTING. 

What is the consequence? Simply 
that when a financial storm threatens 
the country, the Exchange is almost cer- 
tain to be the center of disturbance. 
No other institution is so sensitive. It 
exaggerates all the symptoms of trouble. 
It sends out its alarming reports as the 
storm-cloud sends out its lightnings. 
Looking at it as the barometer of values, 
the timid naturally conclude that every- 
thing is lost, and thus the evil is unduly 
magnified. Wall Street is as much the 
natural field for panics as the prairie is 
for tornadoes. 

If the Exchange has been of advan- 
tage to the business interests of the 
country, those who have had dealings 
with it should be ready to testify in its 
favor. Of the thousands and thousands 



SPECULATING. 143 

who have visited it in person or by- 
proxy, and done a little business with 
it, how many are ready to rise up and 
call it blessed, except in a very quali- 
fied sense ? If all were to give their 
experiences, what would the verdict be ? 
It is to be apprehended that the evi- 
dence of a very decided majority would 
not be flattering to Wall Street's famous 
institution; that their testimony would 
be that they had found it easier to lose 
money there than to make it. 

But why mince matters ? "Why deal 
in doubtful phrases ? Why not at once 
declare what the discussion of the sub- 
ject inevitably leads to — viz., that the 
New York Stock Exchange, which is 
the soul, the motive power of Wall 
Street, is an evil in the land, a danger 



144 THE ART OF INVESTING, 

to private wealth, a disturbing force in 
general business, and a foe to public 
morals. A not overdrawn description 
would picture it as an enormous devil- 
fish with a hundred thousand arms 
reaching into all parts of the country, 
and all equipped with suckers more or 
less powerful, and busy every one of 
them, in extracting nourishment for 
the monster to which it belongs. The 
trouble is that its tentacles are rarely 
seen. They work in the dark ; they have 
the gift of invisibility. But, oh, how 
many victims they have crushed ! Yon- 
der is a bank that is supposed to be as 
solid as the hills. Rich and poor make 
it the depository of their surpluses. It 
enjoys the confidence of all. But in an 
evil hour one of the arms of the Wall 



SPECULATING, 145 

Street octopus has fastened itself upon 
it and penetrated to its safe, and pretty 
soon its president, or its cashier, or its 
managing director, will be gone — gone 
to Canada — and the bank will be 
wrecked. There is a citizen who has 
the respect of all. He is a good man, 
useful in his community, and the strong- 
hold of his family and his friends. But, 
somehow, he is caught in the deadly 
embrace, and soon he will be a bank- 
rupt and a defaulter, if not a suicide. 
Such cases, by their frequency, have 
almost ceased to surprise ; and yet they 
represent but a small portion of the 
losses actually wrought. Most of the 
injuries inflicted by stock-gambling are 
unknown, except to the sufferers. Wall 
Street's victims, as a rule, do not expose 

13 



146 THE ART OF INVESTING. 

their wounds unless they are mortal. 
The aggregate tax upon the country for 
the support of its operations is some- 
thing enormous. It can not be other- 
wise when we see how Wall Street lives 
and flourishes. It maintains a good- 
sized army of operators, the member- 
ship of the Stock Exchange numbering 
nearly twelve hundred — without count- 
ing " curbstone " men and other camp- 
followers — who spend with the lavish- 
ness of soldiers of fortune, while some 
of them take unparalleled fortunes out 
of the street. And yet "Wall Street 
does not produce a dollar. It creates 
nothing. It draws its sustenance en- 
tirely from outsiders. It is a blood- 
sucker. 

That Wall Street should continue 



SPECULATING. 147 

to attract fresh patrons and victims, 
in view of the numerous warnings they 
have received, would be unaccountable 
were it not for that feverish desire for 
sudden riches which pervades the whole 
country, and which "the street" has 
been mainly instrumental in producing. 
It is said of the cuttle-fish that it dis- 
charges a fluid which darkens the 
water all about it, and so blinds its 
prey that they are helpless against its 
attacks. The Wall Street monster — 
the comparison still holds good — by 
the example of its few conspicuous suc- 
cesses and its general demoralization, 
so impregnates the atmosphere of the 
whole country with the speculative 
mania, that thousands and thousands 
can not resist it. There is no village so 



148 THE ART OF INVESTING. 

small or so remote that it may not have 
its local speculator. No calling or pro- 
fession escapes the contagion. The ac- 
commodations for all are ample. Wall 
Street has its wire connections with all 
points, and there are plenty of middle- 
men to instruct the uninitiated and 
take their orders for stocks. The "mar- 
gin " feature is the cleverest bait. The 
fact that, by putting up one thousand 
dollars in cash, you can buy or sell from 
ten to twenty thousand dollars in stocks, 
and take a profit on the larger amount, 
is to many an irresistible temptation. 
Then, in theory, it is so easy to win by 
speculation ! To buy at a low figure 
and sell at a higher, or to sell at a high 
figure and afterward buy at a lower, 
seems such a simple operation ! It al- 



SPECULATING. 149 

most looks as if you could go into "Wall 
Street and pick up money from tlie side- 
walks. Those who have made the at- 
tempt, however, have found the practice 
very different from the theory. When 
the cleverest operators, the trained ha- 
bitues of the street, so often make ship- 
wreck, what hope is there for the inex- 
perienced ? A loss, however, is usually 
incurred before the real difficulties of 
the situation are realized, and then, in 
nine cases in ten, there exists on the 
part of speculators, out of sheer despera- 
tion or from the fascination that attends 
the game, the determination to try an- 
other chance, and in that way good 
money is thrown after bad until ruin is 
reached. It is folly to charge upon 
Wall Street sharpers the seduction of 



ISO THE ART OF INVESTING. 

such men. They lose because they 
want to make money, are not particular 
how they make it, and flatter themselves 
that they are sharp enough to win where 
others have failed. They are their own 
victims. 

And yet they are not the only suf- 
ferers, and possibly not the greatest. 
The man who wins somebody else's 
money in Wall Street is far more than 
likely to lose it, and more with it, at the 
next venture he makes. And even the 
few so-called lucky ones who retire with 
their winnings, are not under all cir- 
cumstances to be envied. The triumph 
of the man who victimizes the public 
with watered stocks, which are no better 
than adulterated wares or counterfeited 
coin, is not without alloy. He may re- 



SPECULATING. 151 

joice iii the money, and in the fleeting 
importance it gives him, but lie knows 
how he got his wealth, and he knows 
that others know how he got it. The 
sensitiveness of pride remains, even if 
conscience be dead. 

But while the writer does not hesi- 
tate to arraisTL the New York Exchange, 
being the acknowledged center of stock 
speculation in the country, as an enemy 
to public morals and general business, 
he admits that it is not the only culprit 
of the kind. The Produce Exchange — 
or Board of Trade, as it is called — of 
Chicago, is a den of speculators, whose 
operations are even more pernicious. 
They affect more far-reaching interests. 
Stocks and bonds are in comparatively 
few hands, and these are generally strong 



152 THE ART OF INVESTING. 

enough to withstand ordinary fluctua- 
tions. But the produce-gambler deals 
with men's necessities, he juggles with 
the staff of life. The soil- worker, who 
takes no part in the gamester's opera- 
tions, and is in no wise responsible for 
them, is liable at any time to be robbed 
of his just rewards through their deals 
and pools; and the mechanic or other 
wage-earner, who is equally innocent of 
complicity with them, is compelled to 
pay them tribute on every loaf of bread 
and every cut of beef or pork he puts 
into his own or his children's mouths. 
Of all kinds of speculative gambling, 
that in breadstuffs and meats is the low- 
est, the meanest. The same comment, 
differing in degree only, will apply to 
such institutions as the Petroleum Board 



SPECULATING. 153 

of Pittsburg. Indeed, it runs the whole 
gamut of the speculative " exchanges " 
and "boards," from the highest down to 
the petit-larceny bucket-shop where, with 
a ten-dollar bill, you can purchase a 
chance on stocks, or oil, or wheat, or 
pork, or anything else that men gamble 
in. All are members of one family, and 
should be regarded and treated alike. 



APPENDIX. 



INVESTMENT SECURITIES. 

Any one having a negotiable security is 
naturally anxious to know its market value; 
especially so if looking for a purchaser. If 
the security happens to be listed at a stock- 
exchange, it is an easy matter to get a quota- 
tion on it, and a buyer can generally be found 
at some price. Or, if looking for a not very 
common security, any one may possibly be 
aided in his search by reference to the same 
quarter. Few, however, outside of profession- 
al bond and share dealers, are familiar with 
the transactions of the exchanges, and it is 
probable that a preponderance of the securi- 
ties dealt in at their boards are in the hands 
of people ignorant of the positions they oc- 
cupy. To such parties, as well as to those 
who may be in quest of particular bonds or 
shares, without knowing exactly where to look 



156 APPENDIX. 

for them, and what their acquisition will cost, 
the following transcripts from the books of 
our principal exchanges, and showing the range 
of their operations, will be of interest, and 
sometimes of advantage. 

It will be seen that, beyond giving, to some 
extent, a preference to obligations that happen 
to be strictly local or most generally held in 
the neighborhood, no positive rule of selection 
has been observed in making up the lists. The 
good and the bad are mingled in a way that is 
quite indiscriminate, and which to the casual 
observer must be somewhat bewildering. To 
any one, however, who has read the accom- 
panying chapters there will be no particular 
mystery about it. Indeed, it is partly to illus- 
trate the points therein made that the follow- 
ing record is given. 

As prices bid or paid are constantly fluctu- 
ating, there is no use in giving present or 
recent figures ; but any one interested in any 
of the securities on the lists can easily inform 
himself by applying to the proper quarter or 
quarters. 



INVESTMENT SECURITIES. 157 

NEW YORK STOCK-EXCHANGE. 
Government Securities. 

Amount. 

TJ. S. <% registered 1891 1244,251,000 

4}^, coupon 1891 ) ' ' 

Js, registered 1907 1 737,812,800 

4's, coupon 1907 ) ' 

6's, currency 1895 3,002,000 

6's, " 1896 8,000,000 

6's, " 1897 9,712,000 

6's, " 1898. 29,904,952 

6's, " 1899 14,004,560 

State Securities. 

Alabama, Class A, 3 to 5 1906, 6,728,800 

Class B, 5's 1906, 539,000 

Class C, 4's 1906, 959,000 

6's, 10-20 1900, 960,000 

Arkansas 6's, Funded 1899-*1900, 3,000,000 

7's, Little Rock & Fort Smith.. . 1,000,000 

7's, Memphis & Little Rock 1,200,000 

7's, Lit. Rock, Pine Bl. & K O.. 1,200,000 

7's, Miss., Ouachita & Red Riv.. 600,000 

7's, Arkansas Central. 1,350,000 

Georgia 7's, gold bonds 1890, 2,000,000 

Louisiana 7's, consolidated 1914, \ 

7's, consolidated, stamped 4's (• 12,039,000 

7's, consolidated, small bonds ) 

Michigan 7's 1890, 231,000 

Missouri 6's, due 1887, 3,242,000 

6's, due 1888, 3,251,000 

6's, due 1889 or 1890, 1,105,000 



i 5 8 



APPENDIX. 



Missouri Asylum or University, due. .1892, 

Funding bonds, due 1894-'95, 

Hannibal & St. Joseph, due 1887, 

New York 6's, gold registered 1887, 

6's, coupon 1887, 

6's, loan..... 1891, 

6's, loan 1892, 

6's, loan 1893, 

North Carolina 6's, old 1886-'98, 

April and October 

to K C. R. R., 1883-'4-'5, 

7 coupons on 

April and October 

7 coupons off 

Funding act. . .1866-1900, 
Funding act. . .1868-1898, 
JSTewb'ds,J.&J..1892-'98, 
New b'ds, J. & J., A. & 0., 

Chatham Railroad 

Special tax, Class 1 - 

Special tax, Class 2 

Special tax, to W'n K C. R. 
Special tax, Western R. R. 
Special tax, Wil. C. & Ru. R. 
Special tax, W'n & Tar. R. 

Trust certificates j 

Consolidated 4's 1910, ; 

Consolidated small ! 

6's 1919, 

Rhode Island 6's, coupon 1893-94, 

South Carolina 6's, Act March 23, 1869, 

non-fundable 1888, 

Brown consoPn 6's.. .1893, 



Amount. 

401,000 
1,000,000 
1,000,000 

942,000 

643,200 
4,302,600 
2,000,000 

473,000 
4,738,000 
3,639,400 

3,000,000 

2,417,000 
1,721,400 
2,383,000 
495,000 
1,200,000 



11,360,000 



3,620,311 

2,593,000 
1,372,000 

5,965,000 
4,280,000 



INVESTMENT SECURITIES, 



Amount. 
Tennessee 6's, old 1890-'2-'f 



6's, new bonds. . . .1892-'8-1900, \ 4,397,000 
6's, new bonds, new series. . 1914? 

Compromise, 3-4-5-6's 1912, 2,014000 

New settlement, 6's 1913, 827,000 

Small bonds 51,600 

Xew settlement, 5's 1913, 349,000 

Small bonds 10,300 

Xew settlement, 3's 1913, 10,743,000 

Small bonds 350,000 

Virginia 6's, old 9,427,000 

6's, new bonds 1866, 700,000 

6's, new bonds 1867, 466,000 

6's, consol. bonds.. . . , 20,239,000 

6's, consol. second series. 2,442,784 

6;s, deferred bonds...) 
6s, deferred bonds, trust receipts. ) 

District of Columbia 3-65's 1924, \ 

Small bonds I 14,033,600 

Registered. . . s ) 

Funding 5's... 1899, \ 

Funding 5's, small.. I 943,400 

Funding 5's, reg'd . . ) 

Railroad Stocks. 

Albany & Susquehanna 3.500,000 

Atchison, Topeka & Santa Fe 68,000,000 

Atlantic & Pacific 25,000,000 

Beech Creek 3,700,000 

Preferred 1,300,000 

Burlington, Cedar Rapids & Northern 5,500,000 

Buffalo, Rochester & Pittsburg 6.000,000 

Preferred 6,000,000 



i6o APPENDIX. 



Amount. 

Canada Southern 15,000,000 

Canadian Pacific 65,000,000 

Central of New Jersey 18,563,200 

Central Iowa 9,100,000 

First preferred 907,000 

Second preferred 1,167,800 

Central Pacific 68,000,000 

Charlotte, Columbia & Augusta 2,578,000 

Chesapeake & Ohio 15,906,138 

First preferred 8,447,800 

Second preferred 11,594,000 

Chicago & Alton 14,091,000 

Preferred 3,479,500 

Chicago & Northwestern 41,373,000 

Preferred 22,325,200 

Chicago, St. Paul, Minneapolis & Omaha. . . 21,403,293 

Preferred 12,646,833 

Chicago, Rock Island & Pacific 50,000,000 

Chicago, Burlington & Quincy 76,385,700 

Chicago, Milwaukee & St. Paul 39,680,361 

Preferred 21,555,900 

Chicago & Eastern Illinois 3,000,000 

Chicago, St. Louis & Pittsburg 10,000,000 

Preferred. . . 20,000,000 

Chicago & Indiana Coal Railway Company. 2,197,800 

Preferred 1,465,200 

Cincinnati, New Orleans & Texas Pacific. . . 3,000,000 

Cincinnati, Indianapolis, St. Louis & Chicago. 10,000,000 

Cincinnati, Jackson & Mackinac 8,320,000 

Preferred 4,680,000 

Cleveland & Pittsburg Guaranteed 11,243,736 

Cleveland, Columbus, Cincinnati & Ind's. . . 14,991,800 

Columbia & Greenville 1,000,000 



INVESTMENT SECURITIES. 161 



Amount. 

Columbia & Greenville preferred 1,000,000 

Columbus, Hocking Valley & Toledo.. ..... 11,700,000 

Delaware, Lackawanna & Western 26,200,000 

Morris & Essex 15,000,000 

New York, Lackawanna & Western 10,000,000 

Dubuque & Sioux City. 5,000,000 

Denver & Eio Grande 38,000,000 

Preferred , 23,650,000 

Denver & Rio Grande Western 7,500,000 

Denver, South Park & Pacific 3,500,000 

Des Moines & Fort Dodge 4,283,100 

Preferred 763,000 

Detroit, Mackinac & Marquette 4,750,000 

Detroit, Bay City & Alpena 1,670,000 

East Tennessee, Virginia & Georgia 27,500,000 

First preferred 11,000,000 

Second preferred 18,500,000 

Elizabethtown, Lexington & Big Sandy 5,000,000 

Evansville & Terre Haute 3,000,000 

Flint & Pere Marquette preferred 6,500,000 

Green Bay, Winona & St. Paul 8,000,000 

Preferred 2,000,000 

Harlem 8,518,100 

Preferred 1,381,500 

Houston & Texas Central 10,000,000 

Illinois Central 40,000,000 

Leased line, 4 per cent stock 10,000,000 

Indiana, Bloomington & Western \ 

Associated first installment paid I 10,000,000 

Associated full assessment paid ) 

Joliet & Chicago 1,500,000 

Kentucky Central 6,600,000 

Keokuk & Western 4,000,000 



162 APPENDIX. 



Amount. 

Kingston & Pembroke 4,500,000 

Lake Erie & Western 11,840,000 

Preferred 11,840,000 

Lake Shore & Michigan Southern 49,466,500 

Long Island ... 10,000,000 

Louisville & Nashville 30,000,000 

Louisville, New Albany & Chicago 5,000,000 

Manhattan Railroad Consolidated 23,895,630 

Marquette, Houghton & Ontonagon 2,378,600 

Preferred 3,278,500 

Mexican Central (Limited) 35,000,000 

Milwaukee, Lake Shore & Western 2,000,000 

Preferred 5,000,000 

Milwaukee & Northern . , 4,131,000 

Michigan Central 18,738,204 

Missouri Pacific 45,000,000 

Missouri, Kansas & Texas 46,405,000 

Mobile & Ohio Railroad Associated 5,320,600 

Morgan's Louisiana & Texas R. R. & S. S. . 1,004,100 

Minneapolis & St. Louis 6,000,000 

Preferred , 4,000,000 

Minneapolis, Sault Ste. Marie & Atlantic. . . 2,426,000 

Preferred 2,426,000 

New York Central & Hudson River 89,428,300 

New York, New Haven & Hartford 15,500,000 

Boston & N. Y. Air Line preferred 

4pc 3,000,000 

New York, Lake Erie & Western 78,000,000 

Preferred.. 8,536,900 

New York, Ontario & Western 58,113,982 

New York & New England 20,000,000 

New Jersey & New York 1,500,000 

Preferred 800,000 



INVESTMENT SECURITIES. 163 

Amount. 

New York, Chicago & St. Louis ) ^ ,™ ~~~ 

Assented ) ' ' 

Preferred ) 2 2,000,000 

Assented ) 

New York, Susquehanna & Western 13,000,000 

Preferred. 8,000,000 

Northern Pacific 49,000,000 

Preferred 37,936,776 

Nashville, Chattanooga & St. Louis 6,688,375 

Norfolk & Western 7,000,000 

Preferred 22,000,000 

Norfolk Southern 1,000,000 

Ohio & Mississippi 20,000,000 

Preferred 4,030,000 

Ohio Southern.. 3,840,000 

Omaha & St. Louis preferred 2,220,500 

Oregon & California 7,000,000 

Preferred 12,000,000 

Oregon & Transcontinental Company 40,000,000 

Oregon Short Line 15,265,000 

Oregon Improvement Company 7,000,000 

Oregon Eailway & Navigation Company. . . 24,000,000 
Philadelphia & Eeading, 1st assessment paid " 

Second assessment paid 

Third assessment paid 

All assessments paid 

Preferred first assessment paid 

Second assessment paid 

Third assessment paid 

All assessments paid 

Pittsburg, Fort Wayne & Chicago Guar'd. . 19,714,285 

Special 10,776,600 

Pitts., McK'pt & Youghiogheny Consol. Stk. 3,000,000 



34,702,000 



1,286,800 



164 APPENDIX. 

Amount. 

Peoria, Decatur & Evansville 8,400,000 

Richmond & Alleghany Reorganization Cert. ) ~ q Q q qqq 

Stamped assessment paid ) ' 

Richmond & Danville 5,000,000 

Richmond & W. P't. Railway & W. Co 40,000,000 

Preferred 5,000,000 

Rome, Watertown & Ogdensburg.. 5,293,900 

Utica & Black River Guaranteed 2,223,000 

South Carolina 4,204,160 

Southern Pacific Company 88,076,200 

St, Louis, Alton & Terre Haute 2,300,000 

Preferred 2,468,400 

Belleville & Southern Illinois preferred. . 1,275,000 

St. Louis & San Francisco 11,954,300 

Preferred 10,000,000 

First preferred 4,500,000 

St. Louis, Arkansas & Texas 9,555,000 

St. Paul &Duluth 4,055,400 

Preferred 5,377,003 

St, Joseph & Grand Island 4,500,000 

St, Paul, Minneapolis & Manitoba 20,000,000 

Texas & Pacific Trust c'tf's, all ass'ts paid.. 32,188,700 

Toledo & Ohio Central 1,592,000 

Preferred 3,108,000 

United New Jersey Railroad & Cons. Co. . . 21,240,400 

Union Pacific 60,868,500 

Utah Central 4,250,000 

Virginia Midland 6,000,000 

Wabash, St. Louis & Pacific ) 9 „, 1Q _ ft 

Full-paid P. C. certificates J ^> 4iy > 5UU 

^^dpr^erredL ) 

Full-paid P. C. certificates ) 

Wheeling & Lake Erie 3,600,000 



INVESTMENT SECURITIES. 165 



Miscellaneous Stocks. 

Amount. 

Bankers 5 & Merchants' Telegraph 3.000,000 

Boston Land Company 800,000 

Canton Company, Baltimore 4,500,000 

Chartiers Valley Gas Company 3,000,000 

Central New Jersey Land Improvement 2,200,000 

Consolidated Gas Company 35,430,000 

Delaware & Hudson Canal 24,500,000 

Equitable Gas-Light Company 3,000,000 

Iron Steamboat Company 2,000,000 

Manhattan Beach Company 5,000,000 

Philadelphia Company 7,500,000 

Pullman's Palace Car Company 15,927,200 

Southern & Atlantic Telegraph 948,875 

Sutro Tunnel Company 20,000,000 

Western Union Telegraph 81,200,000 

Northwestern Telegraph 2,500,000 

Central & South American Telegraph 4,006,600 

Commercial Telegraph Company 1,800,000 

Preferred 200,000 

Mexican Telegraph Company 1,500,000 

Joliet Steel Company 2,666,000 

Coal axd Mining Stocks. 

American Coal 1,500,000 

Consolidation Coal of Maryland 10,250,000 

Cumberland Coal & Iron 500,000 

Colorado Coal & Iron Company 10,000,000 

Cameron Iron & Coal Company 2,720,900 

Columbus & Hocking Coal & Iron 4,700,000 

Marshall Consolidated Coal Company 2,000,000 

Maryland Coal Company 4,400,000 

New York & Perry Coal & Iron Company. . 3,000,000 



1 66 APPENDIX. 



Amount. 

New Central Coal Company 5,000,000 

Pennsylvania Coal 5,000,000 

Quicksilver Mining Company 5,708,700 

Preferred 4,291,300 

Tennessee Coal, Iron & Railroad Company. 10,000,000 

Express Stocks. 

Adams Express 12,000,000 

American Express 18,000,000 

United States Express , 10,000,000 

Wells Fargo Express 6,250,000 

Pacific Mail Steamship Company 20,000,000 

Railroad Bonds. 

Atchison, Topeka & Santa Fe 4£'s 1920, 4,687,000 

Sinking-fund 6's 1911, 12,348,000 

Atlantic & Pacific Guar. 1st gold 4's. .1937, 17,610,000 

Beech Creek first gold 4's 1936, 5,000,000 

Baltimore & Ohio first 6's, Park'g bch, 1919, 3,000,000 

5 ' s ^ ld 1885-1925,) 

Registered ) 

Boston, Hoosac Tunnel & Wn. Deb. 5's, 1913, 2,000,000 

Burlington, C. R. & Northern 1st 5's. .1906, 6,500,000 

Con. 1st & Col. Tr., gold 5's 1934, ) g m Q()() 

Registered ) 

Minneapolis & St. Louis 1st g 7's g'd, 1927, 150,000 

Iowa City & Western 1st gold 7's. . .1909, 456,000 

Cedar Rapids, Iowa, F's & K 1st 6's, 1920, 825,000 

1st 5's 1921, 1,905,000 

Buffalo, K Y. & Ph. Ry. Con. 1st 6's, 1921, ) ,, Ann Ann 

m I ,>* , i n,ooo,ooo 

Trust certificates , ) 

Railroad general 6's 1924, ) ~ ^aa aaa 

Trust certificates „ ......... * o J 



INVESTMENT SECURITIES. 



167 



Canada Southern 1st in't gt'd 5's 1908, 

2d mortgage 5's 1913, 

Registered 

Central Iowa 1st mortgage T's 1899, 

Coupons off 

Eastern division 1st 6's 1912, 

Illinois division 1st 6's 1912, 

Central E, R. & Bkg. Co. G. col. g 5's, 1937, 

Chesapeake & Ohio Pur. M'y. Fd 1898, 

6's gold, Series A 1908, 

6's gold, Series B 1908 

Coupons off 

Small bonds 1908. 

Coupons off 

Extension coupons, gold 4'? 1986, 

Regular 4's 1986, 

6's, currency 1918, 

Small bonds 1918, 

Mortgage 6's 1911, 

Chesapeake, Ohio & S. TT. Mtge. 5-6's, 1911, 

2d mortgage 6's 1911, 

Chicago & Alton 1st mortgage T's. . . 1893, 

Sinking fund, gold 6's 1903, 

Louisiana & Missouri River 1st T's. .1900, 

2d T's 1900, 

St. Louis, Jacksonville & C. 1st T's. .1894, 

1st guaranteed (564) 7's 1894, 

2d mortgage (360) 7's 1898, 

2d guaranteed (188) 7's 1898, 

Mississippi Eiver B'ge 1st S. F. g 6's, 1912, 

Chicago, B. & Q. consolidated T's 1903, 

5's. sinking fund 1901, 

5's, debentures 1913, 



Amount. 
14,000,000 

6,000,000 

3,700,000 

1,515.000 
1,520,000 
5,000,000 
2,300,000 
2,000,000 



15,000,000 



10,122,500 

2,000,000 
6,6T6,000 
2,495.000 
2,383,000 
2,655,000 
1,785,000 

300,000 
2,365,000 

564,000 
44,000 

188,000 

660,000 

30,000,000 

2,500,000 

9,000,000 



168 APPENDIX. 



Amount. 

C. B. & Q., Iowa Division S. F. 5's 1919, 3,000,000 

4's 1919, 10,591,000 

Denver Division 4's 1922, 7,968,000 

4's 1921, 4,300,000 

Nebraska Extension 4's 1927, 7,600,000 

Registered 400,000 

Chicago, Burlington & North. 1st 5's. .1926, 9,000,000 

Debenture 6's 1896, 2,250,000 

Chicago, R. I. & Pacific 6's, coupon. . .1917, ) io ~ AA AAA 

6's, registered 1917, \ 13 ' 500 > 000 

Extension & Col. 5's 1934, > 

Registered ) 

Des Moines & Fort Dodge 1st 4's. . . .1905, 1,200,000 

1st 2£'s 1905, 1,200,000 

Extension 4's 672,000 

Keokuk & Des Moines 1st Mg. 5's.. .1923, 2,750,000 

Central Railroad of N. J., 1st 7's.. . .1890, 5,000,000 



1st consolidated 7's 1899, 

Assented 

Convertible 7's 1902, 



j- 25,000,000 

Assented } 5 ' 000 ' 000 

Convertible debenture 6's 1908, 5,000,000 

Interim bond certificates 12,000,000 

Lehigh & W. B. Con. guaranteed. . .1900, ) ii ~ AA AAA 

Assented 1" 11 ' 500 ' 000 

Am. Dock & Improvement Co. 5's.. .1921, 5,000,000 

M. & St. Paul's 1st M. 8's, P. D 1898, 3,674,000 

2d 7 3-10 P. D 1898, 1,241,000 

1st 7's $ gold, R. D 1902, | 

1st 7's £ gold, R. D 1902, 

1st mortgage La. Consolidated 7's, 1893, 5,264,000 

1st mortgage I. & M. 7's 1897, 3,198,000 

1st mortgage I. & D. 7's 1899, 541,000 



^ I 3,804,000 



INVESTMENT SECURITIES. 169 

Amount. 

M. & St. P. 1st mortgage C. & M. 7s . 1903, 2,393,000 

Consolidated 7s 1905, 35,000,000 

1st mortgage 7's, I. & D. extension, 1908, 3,505,000 

1st 6's, Southwestern Division 1909, 4,000,000 

1st 5's Louisiana C. & Dav 1919, 3,000,000 

1st South Min. Division 6's 1910, 7,432,000 

1st H. & D. Division 7s 1910, 5,680,000 

5's 1910, 585,000 

Chicago & Pacific Division 6's 1910, 2,500,000 

1st Chicago & Pacific W. 5's, 1921, 24,540,000 

Chicago & Mo. River Division 5's. 1926, 2,049,000 

Mineral Point Division 5's 1910, 2,840,000 

C. & Lake Superior Division 5's.. .1921, 1,360,000 

Wisconsin & Min. Division 5's.. . .1921, 4,755,000 

Terminal 5's 1914, 4,666,000 

Far. & So. 6's Assu 1924, 1,250,000 

Inc. convertible sinking fund 5's.. 1916, 2,000,000 

Dakota & Great Southern 5's 1916, 1,000,000 

Chicago and Northwestern Con. 7s, 1915, 12,900,000 



Coupon gold r, 1902, , 

Registered gold 7a 1902, ) ' ' 

Sinking fund 6's 1879-1929, ) 

Registered ) 

£ g «;v«,-:::::;:::::::. 18 . 79 :r.1 **»» 

25 years debenture 5's 1909, ) A AnA nnA 

Registered \ ^ 000 ' 000 

Extension gold 4's 1886-1926, 8,190,000 

Escanaba & Lake Superior 1st 6's.. .1901, 720,000 

Des Moines & Minneapolis 1st 7's.. .1907, 600,000 

Iowa Midland 1st mortgage 8's 1900, 1,350,000 

15 



i7o APPENDIX. 



Amount. 

Peninsula 1st convertible 7's 1898, 152,000 

Chicago & Mil. 1st mortgage 7's 1898, 1,700,000 

Winona & St. Pet's 2d 7's 1907, 1,592,000 

Milwaukee & Madison 1st 6's 1905, 1,600,000 

Ottumwa C. F. & St. P. 1st 5's 1909, 1,600,000 

Northern Illinois 1st 5's 1910, 1,500,000 

C. C. C. & Ind's 1st 7's sinking fund.. .1899, 3,000,000 

Consolidated mortgage 7's 1914, ) „ ~ AA nAA 

Sinking fund 7's. 1914, \ 7 >™ > 000 

General consolidated gold 6's 1934, ) « kaa nnn 

Registered ) ' ' 

Chicago, St. Paul, Min. & O'a Con. 6's, 1930, 22,839,000 

Chicago, St. Paul & Min. 1st 6's 1918, 3,000,000 

N. Wisconsin 1st mortgage 6's. 1930, 800,000 

St. Paul & Sioux City 1st g. 6's 1919, 6,080,200 

Chicago & Eastern Illinois 1st S. F. C'y, 1907, 3,000,000 

Small bonds 

1st consolidated 6's gold . . 1934, 3,000,000 

Chicago, St. L. & Pitts. 1st con. g. 5's, 1932, ) 22 ~~~ ftA ~ 

Registered ) 

Chicago & Western Ind. 1st S. F. g. 6's, 1919, 2,500,000 

General mortgage g. 6's 1932, 8,896,666 

Chicago & St. Louis 1st 6's 1915, 1,500,000 

Chicago & Ind. Coal Railway 1st 5's.. .1936, 3,689,000 

Cin., Ind., St. Louis & Chicago 1st g. 4's, 1936, ) 1 qw. ~~~ 

Registered f ' ' 

Cin., Jack. & Mac. 1st con. g. 5's 1936, 1,400,000 

Columbia & GreenviUe 1st 6's 1916, 2,000,000 

2d 6's 1926, 1,000,000 

Columbus, Hocking V. & Tol. Con, g. 5's, 1931, 14,500,000 

General mortgage gold 6's 1904, 2,000,000 

Columbus & Cincinnati Midland 1st 6's, 1914, 2,000,000 

Delaware, Lack. & Western Conv. 7's. . 1892, 600,000 



INVESTMENT SECURITIES. 171 



Amount. 

Del. Lack. & W. Mortgage 7's 1907, 10,000,000 

Syracuse, Binghamton & N. Y. 1st 7's, 1906, 1,750,000 

Morris & Essex 1st mortgage 7's 1914, 5,000,000 

2d 7's 1891, 3,000,000 

Bonds 7's 1900, 281,000 

7's of 1871-1901, 4,991,000 

1st consolidated guaranteed 7's. . .1915, 25,000,000 

New York, Lack. & Western 1st 6's. . 1921, 12,000,000 

Construction 5's 1923, 5,000,000 

Del. & Hudson Canal 1st reg. 7's. . . . 1891, 4,988,000 

1st extension regular 7's 1891, 549,000 



Coupon 7's 1894, | 

Kegistered 7's 1894, 

1st Pennsylvania Division c. 7's. . . 1917, 



st Pennsylvania Dmsxon e. 7 s.. 1917, > 

Eegistered 1917, ) 

Albany & Susquehanna 1st 7's 1888, 1,000,000 

1st con guaranteed 7's 1906, ) Q 

Kegistered ) ' 

6's 1906, ) 5 4g8 00Q 

Kegistered ... ) ' ' 

Kens'r & Saratoga 1st coupon 7's. . . . 1921, ) ~ nA nAA 

1st regular 7's 1921, \ 2 ' 000 ' ()()() 

Denver & Kio Grande 1st Con. g. 4's. .1936, 22,575,000 

Denver & Rio Grande 1st mort. g. 7's, 1900, 6,382,500 

Denver, S. P'k & Pacific 1st g. 7's 1905, 1,800,000 

Denver & Kio Grande W'n 1st g. 6's. .1911, ) K QK „ nnA 

a j. t r 0,00 /,UUU 

Assented ) 

Detroit, Mackinac & Marquette 1st 6's, 1921, 2,280,000 

Land grant 3+ S. A 1911, 4,560,000 

Detroit, Bay City & Alpena 1st g. 6's.. 1913, 2,300,000 

E. Tenn., Virginia & Georgia 1st 7's. . . 1900, 3,500,000 

Divisional 5's 1930, 3,106,000 

E. Tenn., Ya. & Ga. Ky. con. 1st g. 5's, 1956, 12,770,000 



172 APPENDIX. 



Amount. 

E. & W. of Alabama 1st con. gold 6's. . 1926, 1,709,000 

Elizabeth City & Norfolk S. F. deb. cert. 6's. . 250,000 

1st mortgage g. 6's 1920, 900,000 

Elizabethtown, Lex. & Big Sandy 6's. .1902, 3,500,000 

Erie 1st mortgage exten'd g. 7's 1897, 2,482,000 

2d exten'd g. 5's 1919, 2,149,000 

3d exten. g. 4*'s 1923, 4,618,000 

4th exten. g. 5's 1920, 2,926,000 

5th 7's 1888, 709,500 

1st con. gold 7's 1920, 16,890,000 

1st con. gold F'd 7's 1920, 3,705,997 

Reorganization 1st lien 6's 1908, 2,500,000 

Long Dock bonds 7 J s 1893, 3,000,000 

Consolidated gold 6's 1935, 4,500,000 

Buffalo, New York & Erie 1st 7's. . .1916, 2,380,000 

N. Y. L. E. & W. new 2d con. 6's. . .1969, 33,597,400 

Collateral Trust 6's 1922, 5,000,000 

Funding coupon 5's 1885-1969, 4,032,000 

Buffalo & Southwestern mort. g. 6's, 1908, ) i Kriri ^^^ 

Small f i' 600 ' 000 

Evansville & Terre H. 1st con. g. 6's. .1921, 3,000,000 

Mount Vernon 1st 6's 1923, 375,000 

Evansville & In's 1st con. gtd g. 6's. . .1926, 1,020,000 

Eureka Springs Railway 1st 6's g 1933, 500,000 

Flint & Pere Marquette mort. g. 6's. . . 1920, 5,000,000 

Fort Worth & Denver City 1st 6's 1921, 6,448,000 

Galveston, Har. & San Ant. 1st g. 6's. .1910, 4,800,000 

2d mortgage g. 7's 1905, 1,000,000 

Western Division 1st g. 5's 1931, 13,500,000 

2d 6's 1931, 6,750,000 

Grand Rapids & Ind. general 5's 1924, ) q oi 7 OOO 

Registered ) ' ' 

Green Bay, W. & St. Paul 1st 6's 1911, 1,600,000 



INVESTMENT SECURITIES. 173 

Amount. 

Gulf, Colorado & Santa Fe 1st 7's 1909, 11,724,000 

Gold 6's, 1923, 6,000,000 

Hannibal & St. Joseph consolidated 6's, 1911, 6,000,000 

Henderson Bridge Company 1st g. 6's, 1931, 2,000,000 

Houston & Texas Cent. 1st M'n L. 7's, 1891, 6,896,000 

1st Western Division 7's 1891, 2,375,000 

1st Waco & N. 7's 1903, 1,140,000 

2d C. Main L. 8's 1912, 4,118,000 

General mortgage g. 6's 1921, > 4 325 qqq 

Trust Company receipts ) ' ' 

Houston, E. & W. Texas 1st g. 7's 1898, 1,344,000 

Illinois CentraL 

12Xf:.v.v.':.v:.v.v.v.v::.v! ra .1 •«*» 

Springfield Division coupon 6's 1898, 1,600,000 

Middle Division regular 5's 1921, 600,000 

Chicago, St. L. & N. O. Ten. Ken 7's, 1897, 541,000 

1st con. 7's 1897, 857,000 

2d mortgage 6's 1907, 80,000 

*t^::::::::::::::::::?°!:\ **» 

Dubuque & Sioux City 2d div. 7's.. .1894, 586,000 

Cedar Falls & Minneapolis 1st 7's . . . 1907, 1,334,000 

Indiana, Bl'n & W. 1st preferred 7's. . . 1900, 1,000,000 

1st 5-6's trust receipts 3,408,000 

2d 5-6's trust receipts 1,477,000 

Eastern Division trust receipts 2,950,000 

Ind's, D. & Sp. 1st 7's Ex. F. coupon. .1906, 1,613,000 

International & Great N'n 1st 6's gold, 1919, 7,954,000 

Coupon 6's 1909, 7,054,000 

Kentucky Central Railway gold 4's. . .1987, 6,600,000 



174 APPENDIX. 



Amount. 

Knoxville & Ohio 1st 6's gold 1925, 2,000,000 

Lake Erie & Western 1st gold 5's 1937, 5,920,000 

Lake Shore & Michigan Southern. 

Cleveland, Pain'le & Ash. 7's 1892, 920,000 

Buffalo & Erie new bonds 7's 1898, 2,784,000 

Kalamazoo & W. Pig'n 1st 7's 1890, 400,000 

Detroit, Montreal & Toledo 1st 7's. .1906, 924,000 

Lake Shore Division bonds 7's 1899, 1,356,000 



Consolidated coupon 1st 7's 1900, 

Registered 1st 1900 ; 



'£ 25,000,000 



Coupon 2d 7's 1903, ) 

Registered 2d 1903, \ 26 > m > m 

Mahoning Coal Railroad 1st 5's 1934, 1,500,000 

Long Island 1st mortgage 7's .1898, 1,500,000 

1st consolidated g. 5's 1931, 5,000,000 

New York & Manhattan B'h 1st 7's, 1897, 500,000 

New Y., B. & Man. B. 1st con. g. 5's, 1935, 783,000 

Louisville & Nashville consolidated 7's, 1898, 7,070,000 

Cecilian Branch 7's 1907, 1,000,000 

New Orleans & Mobile 1st g. 6's. . . .1930, 5,000,000 

2d 6's 1930, 1,000,000 

E. H. & Nashville 1st g. 6's 1919, 2,400,000 

General mortgage g. 6's 1930, 20,000,000 

Pensacola Division 6's 1920, 600,000 

St. Louis Division 1st g. 6's 1921, 3,500,000 

2d g. 3's 1980, 3,000,000 

Nashville & Dec. 1st 7's 1900, 1,900,000 

South & N. Ala. sinking fund 6's. . .1910, 2,000,000 

Louisville, Cin. & Lexington g. 6's. .1931, 7,000,000 

Trust bonds g. 6's 1922, 10,000,000 

Ten-forty g. 6's 1924, 5,000,000 

5 per cent fifty year gold bonds 1937, 1,350,000 

Pens. & At. 1st 6's gold guaranteed, 1921, 3,000,000 



INVESTMENT SECURITIES. 175 



Amount. 

Louisville, N. Albany & Chicago 1st 6's, 1910, 3,000,000 

Consolidated gold 6's 1916, 3,500,000 

Louisville, N. 0. & Texas 1st gold 4's, 1934, 11,140,000 

2d mortgage 5's 1934, 8,117,000 

Memphis & Charleston 6's gold 1924, 1,000,000 

Metropolitan Elevated 1st g. 6's 1908, 10,818,000 

2d 6's 1899, 4,000,000 

Mexican Central 1st mortgage 7's 1911, \ 

Ex-coupon 6-7-8 I 41,170,000 

New assented 4's ) 

Income bonds 1911, 8,734,000 

Michigan Central 1st consolidated 7's. 1902, 8,000,000 

5's 1902, 2,000,000 

6's 1909, 1,500,000 

Coupon 5's 1931, ) , AnA AAA 

B . , ,,, -mo-, r 4,000,000 

Registered 5 s 1931, ) 

Jack., Lan. & Sag. 6's 1891, 1,100,000 

Milwaukee & Nor. 1st main line, 6's.. .1910, 2,155,000 

On extension 1st 6's 1913, 1,976,000 

Milwaukee, Lake Shore & W'n 1st g. 6's, 1921, 4,350,000 

Convertible debenture 5's 1907, 600,000 

Michigan Division 1st 6's 1924, 1,281,000 

Ashland Division 1st g. 6's 1925, 1,000,000 

Minneapolis & St. Louis 1st g. 7's 1927, 950,000 

Iowa extension 1st g. 7's 1909, 1,015,000 

2d mortgage 7's 1891, 500,000 

Southwestern extension 1st g. 7's. . .1910, 636,000 

Pacific extension 1st g. 6's 1921, 1,382,000 

Improvement & Equipment 6's 1922, 2,000,000 

Minneapolis & Pacific 1st mortgage 5's, 1936, 3,035,000 

Minneapolis & Northwestern 1st 5's g., 1934, 7,783,000 

Minn., Sault Ste. Marie & Atl. 1st g. 5's, 1926, 4,000,000 

Missouri, Kansas & T. Gen. Cons. g. 6's, 1920, 35,815,000 



176 APPENDIX. 

Amount. 

M. K. & T. Gold 5's 1920, 9,284,000 

Consolidated g. 7's 1904-5-6, 14,877,000 

2d mortgage Inc 1911, 630,000 

H. & Central Missouri 1st g. 7's 1890, 664,000 

Mobile & Ohio new mortgage g. 6's. . . 1927, 7,000,000 

Collateral trust 6's 1892, 59,000 

1st extension 6's . 1927, 1,000,000 

St. Louis & Cairo g. 4's guaranteed, 1931, 4,000,000 

Morgan's Louisiana & Texas 1st g. 6's, 1920, 1,494,000 

1st 7's 1918, 5,000,000 

Nashville, Chat. & St. Louis 1st 7's. . . . 1913, 6,800,000 

2d 6's 1901, 1,000,000 

New York Central 6's 1887, 2,391,000 

Debt, certificates extended 5's 1893, 6,450,000 

New York & Hudson 1st coupon 7's, 1903, ) on nnA ^^ 

1st registered 1903, \ d0 > m > m 

De £gLTe e red S ^ } 7 ' 850 ' 000 

Harlem 1st mortgage 7's, coupon. . .1900, ) 10 ^^ ^^ 

7's, registered 1900, f 12 ' 000 ' 0()0 

New Jersey Junction guar. 1st 4's 1986, ) 2 0ft0 ™ 

Kegistered certificates ) ' ' 

New York Elevated 1st mortgage 7's. .1906, 8,500,000 

New York, Penn. & Ohio prior lien 6's, 1895, 8,000,000 

New York City & Northern Gen. M. 6's, 1910 ? \ 

Trust Company receipts I I 4,000,000 

Assented ) 

New York & New England 1st 7's 1905, 6,000,000 

1st 6's 1905, 4,000,000 

N. Y., Ch. & St, L. 1st 6's T't ftec. Ass'd. . . ) 15 qoq 000 

New Trust Company receipts ) ' ' 

2d 6's 1923, 10,000,000 

New York, Ontario & W. 1st gold 6's.. 1914, 3,000,000 



INVESTMENT SECURITIES. 177 

Amount. 

New York, Susq'a & W'n debent. 6's. . 1897, ) 6Q() m 

Coupons off ) 

1st refunding 5's 1937, 3,750,000 

2d mortgage 4£'s 1937, 636,000 

Midland Railroad of New J. 1st 6's, 1910, 3,500,000 

N. Y., N. Haven & Hartford 1st reg. 4's, 1903, 2,000,000 

N. Y., Texas & Mexican guar. 1st 4's. . 1912, 1,442,500 

Northern Pacific Gen. 1st M. R. R., coupon ) - Q Qno nAA 

L'd Gt. gold 6's, 1921, regular \ 53 ' 309 ' 00() 

Gen. 2d M. R. R., coupon ) oonooooo 

L. G. sinking fund gold 6's, 1933, regular J * u > uw > uw 

Di ^ id ^T iP \ 4,640,821 

Extended ) ' 

James River Valley 1st 6's, gold. . . .1936, 963,000 

Spokane & Pal. 1st sinking fund g. 6's, 1936, 688,000 

St. Paul & N. Pacific Gen. g. 6's. . . .1923, ) 6 30Q Q()() 

Registered certificates j ' ' 

Helena & Red M'n 1st g. 6's 1937, 400,000 

Duluth & Manitoba 1st g. 6's 1936, 1,650,000 

Hel. B. Valley & Butte 1st 6's, g. . . .1937, 600,000 

Nor. Pacific Term'l Co. 1st gold 6's. . .1933, 3,000,000 

New Orleans Pacific 1st 6's, gold 1920, ) 

Coupons off I 6,720,000 

Trust Company receipts ) 

N. Orleans & N. E'n prior lien gold 6's, 1915, 1,050,000 

Norfolk & Western Gen'l Mort. 6's. . . .1931, 6,902,000 

New River 1st 6's 1932, 2,000,000 

Improvement & extension g. 6's 1934, 3,500,000 

Adjustment mortgage g. 7's 1924, 1,500,000 

Ogdensburg & L. Champlain 1st con. 6's, 1920, 3,500,000 

Ohio & Miss. Cons, sinking fund 7's. . .1898, 3,435,000 

Consolidated 7's 1898, 3,066,000 

2d consolidated 7's . . .1911, 3,715,000 



178 



APPENDIX. 



Amount. 

Ohio&Miss. 1st Springfield Division 7's.l905, 3,000,000 

1st general 5's 1932, 3,216,000 

Ohio Central 1st Ter'l Trust 6's 1920, 600,000 

1st Mini Division 6's 1921, 300,000 

Ohio River Railroad 1st g. 5's 1936, 2,000,000 

Ohio Southern 1st mortgage 6's 1921, 2,100,000 

Omaha & St, Louis Railway 1st 4's. . . . 1937, 2,717,000 

Oregon & California 1st g. 6's 1921, 9,000,000 

Oregon & Transcontinental 6's. . . 1882-1922, 10,063,000 

Oregon Improvement Co. 1st g. 6's. . . . 1910, 5,000,000 

Oregon R'y & Navigation 1st g. 6's. . . . 1909, 6,000,000 

Consolidated mortgage g. 5's 1925, 9,137,000 

Panama sinking fund Sub'y g. 6's 1910, 2,747,000 

Peoria, Decatur & Evansville 1st 6's. . . 1920, 1,287,000 

Evansville Division 1st 6's 1920, 1,470,000 

2d mortgage g. 5's 1927, 2,088,000 

Peoria & Pekin Union 1st g. 6's 1921, 1,500,000 

2d mortgage g. 4j's 1921, 1,499,000 

Central Pacific, gold bonds 6's 1895, 

1896 ' \ 25,883,000 

1897, 

1898, , 

San Joaq'n Branch g. 6's 1900, 6,080,000 

California & Oregon 1st g. 6's 1888, 6,000,000 

Series B. g. 6's. 1892, 5,860,000 

Land grant g. 6's 1890, 9,436,000 

Mortgage bond 6's 1936, 12,000,000 

Western Pacific bonds 6's 1899, 2,735,000 

Nor. R'y (Cal.) 1st g. 6's guaranteed. 1907, 3,964,000 

Southern Pacific of Cal. 1st g. 6's, 1905-'12, 38,447,000 

S. Pacific of Arizona guar. 1st 6's, 1909-'10, 10,000,000 

Southern Pacific of N. Mexico 1st 6's, 1911, 5,000,000 



INVESTMENT SECURITIES. 179 



Amount. 



Union Pacific 1st 6's 1896,1 

1 



1897, . 

1898 \ 27 > 229 > 000 






1899, 

Land grants 7's v. 1888-'89, ' 1,270,000 

Sinking fund 8's 1893,) 14348000 

Eegistered 8's 1893, \ 14 > d4 ^ uu 

Collateral trust 6's 1908, 4,423,000 

5's. . . 1907, 5,583,000 

Kansas Pacific 1st 6's 1895, 2,240,000 

1st 6's. . 1896, 4,063,000 

Denver Division 6's assented 1899, 6,242,000 

1st consolidated 6's 1919, 13,855,000 

Central Branch U. P. F'd coup. 7's. .1895, 630,000 

Atchison, Col. & Pacific 1st 6's 1905, 3,672,000 

Atchison Jew'l Co. & W. 1st 6's 1905, 542,000 

Oregon Short Line 1st 6's 1922, 14,931,000 

Utah Southern Gen'l mortgage 7's. . 1909, 1,950,000 

Extension 1st 7's 1909, 1,950,000 

Missouri Pacific 1st consolidated 6's, 1920, 20,184,000 

3d mortgage 7's 1906, 3,328,000 

Pacific Hallway of Mo. 1st mort. 6's, 1888, 7,000,000 

2d mortgage 7's. . . 1891, 2,573,000 

Verdig's Valley, Ind. & W. 1st 5's.. .1926, 750,000 

Leroy & City Yal. Air Line 1st 5's. .1926, 520,000 

St, L. & San Fran. 2d 6's, class A. . .1906, 500,000 

6's, class C. 1906, 2,400,000 

6's, class B 1906, 2,766,500 

1st 6's Pierce C. & O. branch 1,090,000 

Equipment 7's 1895, 650,000 

General mortgage 6's 1931, 7,732,000 

5's. 1931, 5,000,000 

South Pacific R. of Missouri 1st 6's. 1888, 7,144,500 



i8o APPENDIX. 



Amount. 

Kansas City & S. W'n 1st 6's gold. . . 1916, 744,000 

Ft. S'th & Van B. Bdg. 1st 6's 1910, 475,000 

St. Louis, Kan. & S. W'n 1st 6's. . . .1916, 735,000 

Texas & Pacific Railway 1st 6's 1905, ) „ 704 n™ 

Ex. coupon } ' 

Consolidated 6's, trust receipts 9,316,000 

Inc. Land Grant Asst'd trust receipts.. . . 7,992,000 

R. G. 6's 1930, trust receipts 13,028,000 

General Mort. & T. trust receipts 2,859,000 

Pennsylvania Railroad Company. 

Pennsylvania Co.'s guar. 4£ 1st coup., 1921, ) 1 r ^ ,™ 

Regular 1921, ) ' ' 

Pittsburg, Chicago & St. Louis 1st coup. 

7's 1900, 2,706,000 

1st regular 7's 1900, 4,157,000 

2d 7's 1913, 2,500,000 

Pitts., Fort Wayne & C. 1st 7's 1912, 5,250,000 

2d 7's. 1912, 5,160,000 

3d 7's 1912, 2,000,000 

Clev. & Pittsburg Cons. S. F. 7's. . . .1900, 2,292,000 

4th sinking fund 6's 1892, 1,105,000 

St. L., V'a & T. H. 1st gtd 7's. .... .1897, 1,899,000 

2d 7's 1898, 1,000,000 

2d guaranteed 7's 1898, 1,600,000 

Phil. & Reading Inc. M. Coupon 7's.. .1896, \ 

Trust receipts I 10,000,000 

4th assessment paid ) 

Debenture coupon 6's 1893, ' 

Trust receipts [ 670,500 

4th assessment paid 

Debenture convertible 7's 1893, 

Trust receipts [ 10,395,900 

4th assessment paid. 



INVESTMENT SECURITIES. 



1S1 



Amount. 
Phil. & R. Preferred 1st series con. 5's 1922, \ 

Trust receipts (■ 6,000,000 

4th assessment paid * 

2d assessment 5's 1933, \ 

Trust receipts I 5,000,000 

4th assessment paid ) 

Pine Creek Railway 6's of 1932, 3,500,000 

Pittsburg, Cleveland & Tol. 1st 6's 1922, 2,400,000 

Pittsburg Junction 1st 6's 1922, 1,440,000 

Pittsburg, McKeesp't & Y. 1st 6's. . . .1932, 2,250,000 

Rome, Wat. & Ogdensburg 1st 7's 1891, 1,021,500 

Consolidated 1st extension 5's 1922, 6,337,000 

Rochester & Pittsburg 1st 6's 1921, 1,300,000 

Consolidated 1st 6's 1922, 3,920,000 

Richmond & Alleghany 1st 7's 1920, ) 

Trust Company receipts v 5,000,000 

Stamped ) 

Richmond & Danville cons. g. 6's. . . . .1915, 6,000,000 

Debenture 6's 1927,) Q 

Extension coupon ) 

Con. mortgage gold 5's 1936, 1,500,000 

Atlanta & Char. 1st preferred 7's. . . . 1897, 500,000 

Atlanta & Charlotte Inc 1900, 750,000 

Richmond & W. P't Ter'l Trust 6's. . .1897, 8,500,000 

San A. & Arans Pass 1st g. 6's. .. 1885-1916, 1,750,000 

1886-1926, 2,598,000 

Scioto "Valley 1st consolidated 7's 1910, ) 6QS Q()0 

Coupons off ) 

St. Joseph & G'd Island 1st 6's 1925, 7,000,000 

St. Louis & Iron Mountain 1st 7's 1892, 4,000,000 

2d 7's 1897, 6,000,000 

Arkansas Branch 1st 7's 1895, 2,500,000 

Cairo & Fulton 1st 7's 1891, 7,555,000 



1 82 APPENDIX. 



Amount. 

Cairo, Arkansas & T. 1st 7s 1897, 1,450,000 

Gen. con. railroad & land-grant 5's, 1931, 38,201,000 

St. Louis, Alt'n & T. H'te 1st 7's. . . . 1894, 2,200,000 

2d mortgage preferred 7's 1894, 2,800,000 

2d mortgage inconvertible 7's 1894, 1,700,000 

Belleville & S. lUs. Railway 1st 8's. .1896, 1,041,000 

Belleville & Carond't 1st 6's 1923, 485,000 

St. Louis, Ark. & Tex. 1st certi. 6's.. . .1936, 12,870,000 

2d certificates 6's 1936, 11,804,000 

St. Paul, Minn. & Manitoba 1st 7's 1909, ) , nQ1 ™ 

Small ) 

2d 6's 1909, 8,000,000 

Dakota extension 6's 1910, ^ 5,676,000 

1st consolidated 6's 1933, 

Eegistered ! 33)444j000 

Reduced to 4J s 

Registered , 

Minneapolis Union 1st 6's.. 1922, 2,150,000 

St, Paul & Duluth 1st 5's .1931, 1,000,000 

South Carolina Railway 1st 6's 1920, 5,000,000 

2d 6's 1931, 1,500,000 

Shenandoah Valley 1st 7's. . . 1909, ) ~~ AAA 

m 4. n • 4. C 2,270,000 

Trust Company receipts ) 

General mortgage 6's 1921, ) .... ft0ft 

Trust receipts ) ' ' 

Sodus Bay & S. 1st 5's gold 1924, 500,000 

Texas Central 1st sinking fund 7's 1909, 2,145,000 

1st mortgage 7's 1911, 1,254,000 

Texas & New Orleans 1st 7's 1905, 1,620,000 

Sabine Division 1st 6's 1912, 2,075,000 

Tol. & Ohio Central 1st gold 5's 1935, 3,000,000 

ToL, Peoria & Western 1st 7's 1917, ) . KAA AAA 

m , n •*. C 4,500,000 

Trust Company receipts ) 



INVESTMENT SECURITIES. 183 



Amount. 

ToL, Ann A. & N. Michigan 1st 6's. . . 1924, 2,120,000 

Tol., Ann Arbor & G. T. 1st 6's gold. .1921, 1,260,000 

ToL, St. L. & Kansas City 1st g. 6's. . .1916, 2,000,000 

Val'y Railway Co. of 0. Con. gold 6's.. 1921, 1,700,000 

Virginia Midland mortgage Inc. 6's. . . 1927, 604,000 

General mortgage 5's 1936, 3,717,000 

Wabash, St. L. & Pac. gen'l mort. 6's, 1920, ) iC AAA AAA 

' ° f 16,000,000 

Trust Company receipts ) 

Chicago Division 5's 1910, 4,500,000 

Havana Division 6's 1910, 1,600,000 

Indianapolis Division 6's 1921, 2,275,000 

Detroit Division 6's 1921, 2,052,000 

Cairo Division 5's. 1931, 3,857,000 

Wabash Railroad mortgage 7's. .1879-1909, 2,000,000 

Tol. & Wabash 1st extended 7's 1890, 3,400,000 

1st St. Louis Division 7's 1889, 2,700,000 

2d mortgage extended 7's 1893, 2,500,000 

Equip, bonds 7's 1883, 600,000 

Consolidated convertible 7's 1907, 2,600,000 

Great Western 1st mortgage 7's 1888, 2,500,000 

2d mortgage 7's 1893, 2,500,000 

Quincy & Tol. 1st mortgage 7's 1890, 500,000 

Hannibal & Naples 1st 7's 1909, 500,000 

111. & So. Iowa 1st extension 6's 1912, 300,000 

St. L., K., N. R'l Est'e & R. 7's 1895, 3,000,000 

Clarinda branch 6's 1919, 264,000 

St. Chas. B'ge 1st 6's 1908, 1,000,000 

Northern Missouri 1st mortgage 7's, 1895, 6,000,000 

Wab., St. L. & P. Iowa trust receipts 2,269,000 

West Shore 1st mortgage 4's guaranteed. . . ) ^ nnn non 

Registered f 0U > UUU > UJJ 

Western Union coupon 7's 1900, ) Q oon AAA 

Kegistered . \ S ' 920 ' 000 



1 84 APPENDIX. 



Amount. 

Northwestern Telegraph 7's 1994, 1,250,000 

Wheeling & Lake Erie 1st 5's. 1926, 3,000,000 

Mutual Union Telegraph Sk'g F. 6's. .1911, 5,000,000 

Man. B. Improvement Co. limited 7's.. 1909, 1,000,000 

Colorado, C'l & I'n 1st construction 6's, 1900, 3,500,000 

Tenn. Coal, Iron & R. Con. 6's 1901, 620,000 

South Pittsburg 1st 6's 1902, 720,000 

Bir. Division 1st Con. 6's 1917, 4,000,000 

Col. & Hock'g Coal & Iron 6's g 1917, 1,000,000 

Income Bonds. 

Atlantic & Pac. W'n Division Inc 1910, ) 1Q - q ^^ 

Small ) ' 

Central Division Inc 1922, 2,100,000 

Central Iowa coupon debenture certificates. 620,000 

Chicago & Eastern Illinois income 1907, 1,000,000 

Des M's & Fort D. 1st Inc. 6's 1905, 1,200,000 

Det., Mack. & Marquette Inc 1921, 1,500,000 

Elizabeth City & Nor. 2d Inc 1970, 1,000,000 

G. Bay, W. & St. Paul 2d Inc 1911, 3,781,000 

Ind., Bl'n & W. Cons. Inc. trust receipts. . . 4,560,000 

Ind's, Decatur & Sp'd 2d Inc 1906, ) 

Trust Company receipts J ' ' 

Lehigh & W. B're Coal Company 1888, ) 

Small bonds 1888, ] 1 ' 11U >'* UU 

Mil., Lake Shore & Western Income 500,000 

Mobile & Ohio 1st preferred debenture 4,763,000 

2d preferred debentures 1,850,000 

3d preferred debentures 600,000 

4th preferred debentures 900,000 

New York, Lake Erie & W'n Inc. 6's. .1977, 508,000 

New York, Penn. & 0. 1st Inc. ace. 7's, 1905, 35,000,000 

Ohio Central Min. Division Inc. 7's. . .1921, 300,000 



INVESTMENT SECURITIES. 185 



Amount. 

Ohio Southern 2d Income 6's 1921, 2,100,000 

Og'b'g & Lake Champlain Income. . . . 1920, 800,000 

Small 200,000 

Rochester & Pittsburg Income 1921, 478,000 

South Carolina Railway Income 6's. . .1931, 3,000,000 

St. L., I. M. & S. 1st 7's preferred int. ac'e.. 348,000 

Sterling Iron & Railway Ser's B. Inc. .1894, 418,000 

Plain Income 6's 1896, 491,000 

Sterling Mountain Railway Income. . .1895, 476,000 

St. L., Alton & T. H. Division bonds. .1894, 1,357,000 

St. Joseph & G'd Island 2d Income. . .1925, 1,680,000 

Shenandoah Valley Income 6's 1923, 2,500,000 



PHILADELPHIA STOCK-EXCHANGE. 

Railroad Stocks. 

Interest. 

Atlantic & Pacific 100 

Bell's Gap 50 

Buffalo, New York & Philadelphia 50 

Preferred 50 

Common, assessment paid 50 

Preferred, assessment paid 50 

Camden & Atlantic 50 

Preferred 50 

Catawissa 50 

1st preferred 50 

2d preferred 50 

Central of New Jersey 100 

Clearfield & Jefferson 

Delaware & Bound Brook 100 

Denver & Rio Grande 100 



1 86 APPENDIX. 



Interest. 

East Pennsylvania 50 

Elmira & Williams 50 

Preferred 50 

Harrisburg 50 

Huntingdon & Broad Top Mountain 50 

Preferred 50 

Lehigh Valley 50 

Little Schuylkill 50 

Minehill 50 

Nesquehoning Valley 50 

Norfolk & Western 100 

Preferred 100 

Norristown 50 

Northern Central 50 

Northern Pacific 100 

Preferred 100 

North Pennsylvania 50 

Oregon & Transcontinental 100 

Pennsylvania r 50 

Philadelphia & Erie 50 

Philadelphia & Reading 50 

Preferred 50 

St. Paul & Duluth 100 

Preferred 100 

Sunbury & Lewis 50 

Texas & Pacific. 100 

United Companies of New Jersey 100 

West Jersey 50 

West Jersey & Atlantic 50 

Canal Stocks. 

Chesapeake & Delaware 50 

Lehigh Navigation 50 



INVESTMENT SECURITIES. 187 



Interest. 

Morris 100 

Preferred 100 

Schuylkill Navigation, preferred 50 

Common 50 

Railroad Bonds. 
Allegheny Valley, regular 7 3-10 

Income 7 

Baltimore & Ohio, E. Side 5 

Belville Delaware, 1st 6 

Consolidated 4 

Bell's Gap, consolidated 6 

Camden & Amboy, mortgage, coupon, 1889 6 

Coupon, 1889 6 

Catawissa, new. 7 

Camden & Atlantic, 1st 7 

2d mortgage 6 

Columbus & Cincinnati Midland 6 

Connecting, 1st 6 

Clearfield & Jefferson 6 

Delaware Railroad, 1st 6 

Delaware & Bound Brook, 1st 7 

East Pennsylvania, 1st 7 

Easton & Amboy. 5 

Elmira & Western, 1st, 1910 6 

Perpetual 5 

Huntingdon & Broad Top, 1st, gold 7 

2d, 1895 , 7 

3d, consolidated, 1895 5 

Ithaca & Athens, 1st. 7 

Lehigh Valley, 1st, coupon 6 

1st, regular, 1898 6 

2d, regular, 1910 ee ., - 7 



1 88 APPENDIX. 

Interest. 

Lehigh Yal. Consolidated mortgage, regular, 1923.. 6 

Consolidated mortgage, coupon, 1923 6 

New Orleans Pacific, 1st, 1920. 6 

New York, Philadelphia & Norfolk, 1st 6 

Income 6 

Norfolk & Western, new railroad, 1st 6 

Debenture 6 

General mortgage 6 

Northern Central, general mort., "A," coup., 1926.. 5 

General mortgage, series " B " 5 

General mortgage, coupon, 1904 6 

Northern Pacific, general mortgage, 6 

2d, coupon or regular '. 6 

North Pacific, 1st, 1898 7 

General mortgage, coupon, 1903 7 

General mortgage, regular, 1903 7 

Debentures 6 

Pennsylvania & New York C. & R., 1896 7 

Regular and coupon, 1906 7 

Pennsylvania, general, coupon, 1910 6 

General, regular, 1910 6 

Consolidated, regular, 1905 6 

Consolidated, coupon, 1905 6 

Consolidated, regular, 1919 5 

Consolidated, coupon, 1919 5 

Pennsylvania Company, regular, 1907 6 

Regular, 1920 4| 

Coupon, 1920 4J- 

Perkiomen, 1st, 1887 6 

Philadelphia & Erie, 2d, 1888 7 

General mortgage, 1920 5 

Philadelphia & Reading, 1st series 5 

Consolidated, 2d series 5 



INVESTMENT SECURITIES. 189 

Interest. 

1st, 1910 6 

2d, coupon, 1893 7 

Improvement 6 

Consolidated, coupon, 1911 7 

Consolidated, regular, 1911 7 

Consolidated, gold, 1911 6 

General mortgage, gold, 1908 6 

General mortgage, 1908 7 

Philadelphia & Reading, income, coupon, 1896 7 

Debenture 6 

Scrip 6 

Deferred income 6 

Convertible adj. scrip, 1888 6 

New convertible, 1893 7 

Var. coupons on 

P. & R. C. & L, Var 7 

Debenture 7 

Philadelphia, Wilmington & Baltimore, trust certi. 4 

Pittsburg, Cincinnati & St. Louis, coupon 7 

Regular, 1900 7 

Sham. Valley & Pott., coupon 7 

Sham. Sun. & Lew 5 

Shenandoah Valley, 1st 7 

General mortgage 6 

Steub. & Ind., 1st, coupon 5 

Sunb. & Lewist., 1st 7 

Sun., Haz. & W., 1928 .*.' 5 

2d, 1938 6 

Texas & Pacific, 1st, gold, 1805 6 

1st, R. G. Division, 1930 6 

Consolidated, gold, 1905 6 

Union & Titusville, 1st, 1890 7 

United New Jersey, consolidated 6 



190 APPENDIX. 



Interest. 

United New Jersey, General mortgage 4 

Warren & Farnsworth, 1st, 1896 7 

West Chester, consolidated, 1891 7 

West Jersey, 1st, 1896 6 

1st, 1899 7 

West Jersey & Atlantic, 1st, 1910 6 

West Pennsylvania, 1st, 1893 6 

Pittsburg Branch, coupon, 1896 6 

West Shore, guaranteed 4 

Canal Bonds. 

Chesapeake & Delaware, extend 5 

Lehigh Navigation, extend 4£ 

Convertible, gold, 1894 , 6 

Railroad loan, 1897 6 

Gold, 1897 6 

Consolidated mortgage, 1911 ... 7 

General mortgage, 1924. 4J 

Greenwood Tract 7 

Pennsylvania, mortgage, 1910 6 

Schuylkill Navigation, 1st, 1897 6 

2d, 1907 6 

Boat loan 7 

Boat loan 6 

Susquehanna, 1918 6 



BOSTON STOCK-EXCHANGE. 

Railroad Stocks. 

Atlantic & Pacific 100 

Atchison, Topeka & Santa Fe 100 

Boston & Albany ...,...«, 100 



INVESTMENT SECURITIES. 191 



Interest. 

Boston, Concord & Montreal, preferred 100 

Boston & Lowell 100 

Boston & Maine 100 

Boston & Providence 100 

California Southern 100 

Central Iowa 100 

2d preferred 100 

Central Massachusetts 100 

Preferred 100 

Cheshire, preferred 100 

Chicago, Burlington & Quincy 100 

Chicago, Burlington & Northern 100 

Chicago & Eastern Illinois 100 

Chicago & West Michigan 100 

Cincinnati, Sand. & Cleveland 50 

Cleveland & Canton 100 

Preferred 100 

Col., Spring. & Cincinnati. . 

Concord 50 

Connecticut & Passumpsic 100 

Connecticut River 100 

Consolidated of Vermont, preferred 100 

Detroit, Lansing & Northern , 100 

Preferred 100 

Dayton & Ironton, preferred .... 

Eastern (Massachusetts). . « 100, 

Preferred 100 

Eastern in New Hampshire 100 

Fitchburg preferred 100 

Flint & Pere Marquette 100 

Preferred 100 

Fort Scott & Gulf 100 

Preferred 100 



192 APPENDIX. 



Interest. 

Iowa F. & Sioux City 100 

Kansas City, Springfield & Memphis 100 

Kansas City, Memphis & Birmingham 

Kansas City, Clinton & Springfield 100 

Little Rock & Fort Smith 100 

Louisville & Missouri River 100 

Maine Central 100 

Manchester & Lawrence 100 

Marquette, Houghton & Ontonagon. 100 

Preferred 100 

Mexican Central 100 

Nashua & Lowell 100 

New York & New England 100 

Preferred 100 

Northern, New Hampshire 100 

Norwich & Worcester 100 

Ogdensburg & Lake Champlain 100 

Old Colony 100 

Philadelphia, Wilmington & Baltimore. 50 

Portsmouth, Great Falls & Conway 100 

Portland, Saco & Portsmouth. 100 

Pullman Palace Car 100 

Revere Beach & Lynn - 100 

Rutland 100 

Preferred 100 

Summit Branch 50 

Toledo, Cincinnati & St. Louis 50 

Union Pacific 100 

Vermont & Massachusetts 100 

Wisconsin Central 100 

Preferred 100 

Worcester, Nashua & Rochester 100 



INVESTMENT SECURITIES. 193 



Railroad Bonds. 

Interest. 

Atchison, Topeka & Santa Fe, plain, 1920 5 

Trust 6 

Collateral trust 5 

Atlantic & Pacific, 1st 4 

Income, 1910 6 

Central Division, 1st 6 

Boston & Maine ," 7 

Boston & Albany, not mortgaged 7 

Burlington & Missouri River, land grant 7 

In Nebraska, non-exempt, 1st 6 

In Nebraska, exempt, 1st 6 

In Nebraska, 1910 4 

Cedar Rapids & Missouri River 7 

Chicago, Burlington & Quincy, Denver Division.. . . 4 

1st, 1903 7 

Southwestern Division 4 

Sinking fund 5 

Plain bonds 4 

Debentures 5 

Chicago, Burlington & Northern 5 

Debenture 6 

Chicago, Milwaukee & St. Paul, Western Division. . 6 

Dubuque Division 6 

Chicago & Eastern Illinois, consolidated 6 

Chicago, Kansas & Western 5 

Incomes 

Chicago & West Michigan 5 

Cincinnati, Sandusky & Cleveland, 1st 7 

Columbus, Springfield & Cincinnati 7 

Connecticut & Passum, 1st 7 

Consolidated Railroad of Vermont 5 

17 



194 APPENDIX. 



Interest. 

California Southern, income 6 

1st, 1926 6 

Detroit, Lansing & Northern, 1st 7 

Dixon, Peoria & H. 8 

Eastern, 1906 6 

Fort Scott, S. E. & M 7 

Fort Scott & Gulf, 1st 7 

Equipment 6 

Fremont & Elk Horn 6 

Iowa Falls & Sioux City 7 

Illinois Grand Trunk 8 

Kansas City & Camden 10 

Kansas City, Topeka & Western, 1st 7 

Kansas City, Em. & Southern, Gulf 7 

Kansas City, Lawrence & Southern, 1st 6-5 

Kansas City, Memphis & Birmingham. 5 

Kansas City, Clinton & Springfield 5 

Kansas City, Springfield & Memphis 6 

Kansas City, St. Joseph & Council Bluffs, 1st 7 

Leavenworth, Topeka & Southwestern 4 

Little Rock & Fort Smith, land grant, 1st 7 

Maine Central, 1912 7 

Marion & McPher 7 

Marquette, Houghton & Ontonagon 6 

1st mortgage. 1923 6 

1925 6 

Mexican Central, 1911 7 

Income 3 

Scrip 

Debenture 10 

New assessment 4 

Bond scrip 

New York & New England, 1st 6 



INVESTMENT SECURITIES. 195 

Interest. 

New York & New England, 1st, 1905 7 

2d mortgage 6 

2d mortgage, scaled 3-5 

New Mexico & Southern Pacific, 1st 7 

Northern Pacific, 1st » 6 

P. d'O. Division 6 

2d mortgage coupon 6 

Ogdensburg & Lake Champlain, 1st. 5 

Consolidated, 1920 6 

Income, 1920 3-6 

Oregon Railway & Navigation Company 7 

Consolidated, gold 5 

Oregon Short Line 6 

Portsmouth, Great Falls & Camden 4£ 

Pueblo & Arkansas V., 1st 7 

Republican Valley 6 

Rutland, 2d mortgage, equipment 5 

1st mortgage 6 

St. Louis, Kansas City & Southwestern 6 

Sonora, 1st 7 

South Kansas 5 

Incomes 

Southern Kansas & Western, 1st. . . 7 

Union Pacific, 1st, gold 6 

Sinking fund, 3d mortgage 8 

Wisconsin Central, 2d series 7 

1st series 5 

Wisconsin Valley, 1st 7 

Worcester, Nashua & Rochester 5 



196 APPENDIX. 

BALTIMORE STOCK-EXCHANGE. 
Railroad Stocks. 

Interest. 

Atlanta & Charleston 100 

Baltimore & Ohio 100 

1st preferred 100 

2d preferred 100 

Canton Co. . . 100 

Central Ohio 50 

Preferred 50 

Cincinnati, Washington & Baltimore 100 

Preferred 100 

Charlotte, Columbia & Augusta 100 

Columbia & Greenville, preferred 100 

Georgia Pacific 

Northern Central 50 

Parkersburg Branch 50 

Petersburg 100 

Pittsburg & Connellsville 

Richmond, York River & Chesapeake. 

Virginia Midland, 1st preferred 100 

Common 100 

Wilmington, Columbia & Augusta 100 

Wilmington & Weldon 100 

Western Maryland 50 

Railroad Bonds. 

Atlanta & Charleston, 1st mortgage 7 

Incomes 6 

Baltimore & Ohio, East Side, 1st 5 

Baltimore & Ohio, extended 4 

Gold 5 



INVESTMENT SECURITIES. 197 

Interest. 

Baltimore & Potomac, 1st 6 

Tunnel 6 

Cape Fear & Yadkin Valley, 1st 6 

Central Ohio, 1st, 1890 6 

Charlotte, Columbia & Augusta, 1st 7 

2d 7 

Cincinnati & Baltimore 7 

Cincinnati, Washington & Baltimore, 1st 4J 

2d 5 

3d 3 

Income 5 

Columbia & Greenville, 1st 6 

2d, 1926.. 6 

Georgia Pacific, 1st, 1922 6 

2d, income 6 

Northern Central, general 4J 

Cur., 1900 6 

Gold, 1900 6 

Gold, 1904 6 

Gold, 1926, Series A 5 

Gold, 1926, Series B 5 

Ohio & Mississippi, Springfield Division 7 

2d 7 

Consolidated sinking fund 7 

General 5 

Petersburg, Class A 5 

Petersburg, Class B , . 6 

Pittsburg & Con., 1st, 1898 7 

Richmond & Danville, gold , 6 

1890... o... 6 

Piedmont Branch , ........ , 8 

Seaboard & Roanoke 5 

Union Railroad, End. by Chattanooga Company.. . 



198 APPENDIX. 

Interest. 

Virgina Midland, 1st series 6 

2d series 6 

3d series 5-6 

4th series 3-4-5 

5th series 5 

Virginia and Tennessee, 4th 8 

5's 5 

West Virginia Central, 1st 6 

Western Alabama, 1890 8 

West Maryland, 3d guaranteed by city 6 

Western North Carolina, 1st, 1890 .* 7 

Consolidated 6 

Wilmington, Columbia & Augusta, 1910 6 

Wilmington & Weldon, new , 5 



THE END. 



SCIENTIFIC PUBLICATIONS. 



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